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Cake day: February 20th, 2025

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  • Thats our monetary policy. People must consume more every year to create more inflation, as technology actively reduces the price of goods.

    If goods get cheaper we have deflation, they create more money supply via lower interest rates, and the price of inelastic shelter gets bid up, and asset holders receive a value windfall until prices rise. Which is why we are at a higher price to income ratio than 2007.

    People born closer to the gold standard are richer, they got in when currency wasnt tethered to consumption.
















  • Did we conclude that, I thought its still heavily debated.

    Some argue in the 50s and 60s the US was spending Europe’s gold to build highways and infrastructure, gifting Americans the wealth with a continuation of the new deal, they then defaulted in 1971 as inflation eroded foreign debt owed.

    Some feel some form of debt accrual is how we derive such a consumption focused standard of living, which is misallocated capital that ends in someone holding the bag when it can’t realistically be paid back, or when population doesn’t grow fast enough like in Japan or most of the developed countries.




  • I do agree with all of your comment. I am left wondering if this is just the end result of fiat currency debasement, leading to decades of debt accrual, and now higher interest rates due to aging global demographics; a phenomenon most central banks have publications on.

    Which is something Ray Dalio talks a lot about, maybe this populism and divide is just a symptom of a larger problem. Germany does do unsustainable immigration to help deal with their aging demographics, which could easily lead to unequal asset price inflation and then nationalism/xenophobia.

    Then obviously CBDC and an attempt to perform financial repression, since financializing housing to derive new money supply to grow aggregate demand won’t work any more.