Taps Coogan – July 21st, 2021
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If you’re looking for an ‘out-there’ but considered view of where the economic world is headed, Viktor Shvets, global strategist at Macquarie Bank, is your man. In the following interview with Macro Voices, he details a multi-decade view that encompasses societal reflections on over-financialization, demographics, over-indebtedness, technology, and so on.
Mr. Shvets punchline? Disinflation and big government are likely to win out over the coming decades, though the next ten years or so is likely to see swings between inflation and deflation as the physical investment associated with new technologies sorts itself out, ultimately driving the cost of capital down to zero.
For what little it’s worth, Mr. Shvets’ longer term outlook sounds an awful lot like taking a trend that has already reached an extreme and then, quite literally, extrapolating it to infinity. The real world doesn’t work that way. I hope Mr. Shvets is wrong on many of his points and disagree with some of his assumptions.
Nonetheless, he has some good points.
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Love your site, and this comment is not directed at you. Why is it that all discussion of macro trends is boiled down (and constrained) to the spectrum of inflation and deflation, while a private cartel, directly and via its agents, relentlessly presses forward with its own private fiat to outbid the natural individual for every asset, thereby taking over the world and imposing a tyranny that is growing all around us, every day. This has been in our faces for two decades now — all while we endlessly talk about the range of inflation and deflation. That range only… Read more »
Thanks and I entirely agree with “the natural individual is fundamental to all of economics” I suspect your first question is rhetorical, but I’ll take a stab at an answer I, for one, get sucked into the inflation/deflation debate like it’s some blackhole because, ultimately, financial asset prices are an expression of the supply demand balance between money in the financial system and the quantity of assets to be purchased with that money. Central banks can control both the quantity of money and the quantity of assets via QE and overnight rates. They add money and remove assets at will,… Read more »