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滞涨的供给解决方案

Jun 7, 2022 David Malpass

华盛顿特区—在新冠引发二战以来最严重的全球衰退仅仅两年多之后，世界经济再次陷入危险。这一次，它同时面临着高通胀和低增长。即使避免了全球衰退，滞胀的痛苦也可能持续数年，对低收入和中等收入经济体造成潜在的不稳定后果——除非实现供给大幅增加。

在乌克兰战争、通胀飙升和利率上升的背景下，预计 2022 年全球经济增长将下滑。世界银行今天发布的最新预测对前景大幅下调：预计今年全球增长将大幅放缓，从 2021 年的 5.7% 降至 2.9%。该预测较 2022 年 1 月的预测（预计今年增长 4.1%）下调了近三分之一。能源和食品价格的飙升，，乌克兰战争引发的供给和贸易中断，以及目前正在进行的必要利率正常化，是下调的主要原因。

新冠已经对发展中经济体的收入增长和减贫造成了重大挫折。乌克兰战争的后果给许多发展中经济体带来了挑战。预计它们将在 2022 年勉强维持 3.4% 的增长——仅为 2021 年的一半，远低于 2011 年至 2019 年的平均水平。同样，中等收入国家 2022 年的增长预测已大幅下调，相对1月份的预测下降 1.3 个百分点。

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Not That Seventies Inflation
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Economics 4

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Dismantling the Fossil-Fuel Economy at Stockholm+50

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0 Comments on this paragraph, 7 Comments on this article

Waleed Addas Jun 12, 2022

The mainstream narrative is still highly obsessed with quantitative growth as against qualitative growth! And after all these 'telling events' since the advent of the financial, fuel and food crisis (3 f's), one would have thought that a renewed focus would turn to the quality of our future lives? The only practical proposal in this article is the recommendation to boost production of all goods and services ....but in the short-run, we will not be able to do that, Mr. President, without the necessary mix from fossil-fuels!
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Elizabeth Pula Jun 8, 2022

I am posting this article again on PS, and specifically on this article for a specific reason. Labor has been fragmented to certain levels that need to be approached totally differently as the contrasting "consolidation" of supply solutions are necessary to allow any labor to be performed in timely and logical sequencing.

https://www.technologyreview.com/2022/04/20/1050392/ai-industry-appen-scale-data-labels/
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Jeremiah Hartnett Jun 8, 2022

The way to grow is to have the lowest input cost possible. The externalities attributed to carbon are whimsical and unproven. Growing will provide us the wealth to innovate and provide cheaper energy solutions compared to fossil fuels. All we are doing now is increasing costs and reducing production. In other words negative productivity.
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vic lai Jun 8, 2022

(1) According to a Chinese economist, during the decades before the Great Financial Recession (GFC) of 2007-09, the money supply in the US had mostly increased in an endogenous manner, when the new net credit creations of the commercial banks accounted for more than 95% of the increase in the total money supply, measured by say M2.
(2) After the GFC, regulatory supervision of the commercial banks had been significantly propped up in the US, say by the Dodd-Frank Act and Basel III, resulting in a relatively stable ratio of total US commercial bank assets to GDP, while at the same time the Fed has massively expanded her balance sheet, through several rounds of QEs, which had directly or indirectly monetized the increased deficit spending of the US federal government in those years, making the increase in the country's money supply much more exogenous than endogenous in nature.
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(3) The US economy with mainly an endogenous increase in MS is less prone to real-economy inflation, but is more vulnerable to virtual-economy inflation, in the form of booming asset market bubbles, which are usually boosted by increasing house-mortgaged credits supplied to the market through the government's well-intentioned encouragement of house-ownership by the average Americans.
When the asset-market bubble bursts one day in the future, the economy will usually run into a long balance-sheet-repairing recession.
(4) The US economy with mainly an exogenous increase in MS is not only prone to virtual-economy inflation (so-called everything-except-gold asset bubble) with the help of both the Fed's QEs and the low-interest-rate environment, but is also vulnerable to real-economy inflation, especially when the federal government over-reacts to an external contingency like a global pandemic or a regional war, and accordingly over-deficit-spends through the help of new money printing, during which usually either the global supply chain is severely being disrupted, or the energy, food and commodities prices are significantly bid up, or both.
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Whether the US economy will also fall into a recession amid high real-economy inflation depends mostly on the debt configuration of the US consumers.
Thanks to the government's stimulus checks, the savings of the US consumers once resumed quickly and their debt level dropped a lot. But today, their debt level increased quickly once again, as shown by the stunning surge in their credit card debts.
This debt-financed consumption spree will prevent the US economy from falling into a recession in the near future, until it can no longer be sustained, especially when the everything asset bubble eventually pops, evaporating the persistently strong positive wealth effect, and if the US government doesn't accommodate it through much higher deficit spending (for fear of aggravating the current inflation).
Coupled with the continued Ukraine war and the intermittent lockdowns in China, stagflation in the US will ensue.
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- vic lai Jun 8, 2022
  
  During the current period of mainly exogenous money supply growth in the US, care must be taken by the US government, the Congress, and the Fed to suitably control the rise in the country's money supply, not through un-intervened free-market commercial bank credit (over-)creations, nor through ad-hoc FED QEs or new-QE-financed stimulus checks which indirectly or directly (over-)finance the government's increased deficit spending, but, like Canada, through holding auctions throughout the year at which new federal securities (bonds and treasury bills) are sold to the country's banks, brokers and investment dealers.
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  Given
  (i) the current interest-rate-hiking cycle and hence rising interest costs of issuing new treasuries by the Treasury Department,
  (ii) the ongoing real-economy inflationary environment, and
  (iii) the Fed's coming commencement of the QT cycle,
  the Treasury Department can force the country's commercial banks to buy a suitable part of the government's newly-issued treasury debts, at suitable interest rates (say, higher than the Fed's RRP), by strengthening the financial regulations of the commercial banks to further limit their ability of credit creation in the real economy, so as to limit the coming domestic inflationary pressure.
  The funds so raised by the government can be stored temporarily in the Fed's Treasury General Account (TGA),
  (A) to prevent the Fed's balance sheet from shrinking too fast as a result of the coming QTs,
  (B) to be used later to help sustain the US consumers' fading deficit spending sometime in the future, say in the form of periodic electronic consumption coupons, which
  (a) can only be used in a certain specified time periods,
  (b) can't be used as personal savings,
  (c) can't be used to repay consumer debts,
  to help prevent the realization of an economic recession in the US, or to help shorten the length of the subsequent balance sheet recession, after the popping of the asset market bubbles in the country's virtual economy.
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  - vic lai Jun 8, 2022
    
    In the good old days the US (and other advanced countries) had mainly been responsible for supplying safe financial assets to the world, the most pristine of which in the global Eurodollar market should be the US treasuries (and US's GSE-related securities).
    Much strengthened financial regulations imposed and enforced after the GFC of 2007-09 has reduced the ability of the US to supply safe assets to the rest of the world, and the shortage problem has been aggravated by the Fed's several rounds of QEs.
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    As for the Fed's coming QTs, the initial phase is to let the existing treasuries in the Fed's balance sheet mature and expire, and never roll them over.
    This non-selling of treasuries in the Fed's balance sheet back to the market won't increase the supply of safe assets in the global Eurodollar market, and so once again, as during the Great Recession of 2007-09, will increase the possibility of a run in the Eurodollar repo markets due to a lack of highly-demanded safe collaterals, leading to a higher and quicker possibility of the eventual popping of the current US everything-asset-market bubble.
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    Provided the Congress can further relax the debt-raising ability of the US Treasury Department by raising further the debt ceiling, so that more new US treasuries can be issued and supplied to the market as safe assets, as suggested upstairs, the problem of lack of safety assets or safe collaterals in the Eurodollar markets can be mitigated, thereby reducing the chance of a run in this wholesale US-dollar market.
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    This way, the everything asset bubble in the US can be sustained for a longer period of time, and its eventual bursting can be further delayed, or even prevented.
    The Ukraine War won't last forever (or so I think), neither will the global pandemic and hence the global supply chain bottlenecks.
    When the inflationary pressure in the US subsides, the Fed can unwind and reverse her rate-hiking and QT cycles, by using interest rate reductions and new QEs to prevent, or cope with the aftermath of, the popping of the country's everything asset bubble.
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    - vic lai Jun 9, 2022
      
      The US Fed's current interest-rate-hike cycle is just a relatively short duration of noise in the overall global symphony background of secular decline in real interest rates over the last few decades, which has mainly been caused by a growing shortage of safe assets worldwide.
      "A confluence of factors ------ ranging from the rise of international reserve holdings to institutional mandates, regulation, and demographic factors ------ has led to a steady rise in the demand for safe assets.
      The supply of safe assets has not been able to keep pace."
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      Both the financially-engineered subprime-mortgage-backed security tranches before the GFC of 2007-09, and today's cryptocurrencies like the Bitcoins and Facebook's Libra, can be regarded as attempts by the private sector to increase the supply of safe (or money-laundering) assets to meet the rising demand of the market.
      This "Safety Trap" can also help explain a wide variety of macroeconomic phenomena, such as the global savings glut, the so-called Greenspan interest rate conundrum of the mid-2000s (the same interest rate conundrum seems to be reappearing today), and their contemporaneous global imbalances.
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      The US federal government always has the spare fiscal capacity to increase the supply of safe assets by issuing public debt.
      Doing so reduces the root imbalance in financial markets and stimulates the economy.
      (i) The proceeds of the extra public debt issuance can be rebated to consumers, like the consumption coupons described upstairs.
      (ii) The US government can renew the country's obsolescent and worn-out public infrastructure, subsidize the ESG movement in the country, and promote 5G/6G and other ICT R&Ds and development, through her own ability to issue safe debt (treasuries) against such projects, imitating China and repeating China's "economic miracle" in the coming decades.
      Unlike China where private property rights are not enforced very rigorously, the US local governments can apply Eminent Domain to help them collect enough private land for public infrastructure constructions.
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滞涨的供给解决方案

Not That Seventies Inflation

Dismantling the Fossil-Fuel Economy at Stockholm+50

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