Where Does the Global Economy Go From Here?

[Gregmal]

3 minutes ago, changegonnacome said:

I hope your right and I’m very very wrong…….I really do……I may have larger than usual short US stock exposure & an international long book in my investment account…..but I’m a USA salary resident cheerleader with my best earning years ahead of me..……big big big picture ‘Changegonnacome Inc’ is unbelievably long a thriving US economy. A 1970’s style stagflation, followed by a Volcker-esque recession is not good for my family or anybody I give a shit about. I hope I’ve got this very wrong but I’ve yet to see much disconfirming data based evidence that I am & it’s why I value your pushback…what you describe is exactly how I will be wrong…..so appreciate your strong views on the matter. Even if we fundamentally disagree.

Lol yin and Yang. Same here. You’re the voice stating where and how I’ll be wrong, if I’m wrong. 
 

Ultimately, assuming one is not a piker, where one chooses to live is the ultimate macro call. All the money in a world and a mansion in Ukraine or a pisspot shitshack in Oklahoma….who got it right? The US and Canada IMO won’t be unseated anytime soon.

[changegonnacome]

9 minutes ago, Gregmal said:

ultimate macro call. All the money in a world and a mansion in Ukraine or a pisspot shitshack in Oklahoma….who got it right? The US and Canada IMO

Correct….Jamie Dimon nailed it not so long ago in some speech I saw and I’ve never forgot and never will…..the USA has the best hand of cards ever dealt a nation ever. Period.   .…..…..energy and food independent…the best economic system..….wonderfully friendly neighbors to the North (Canada) & South ( Mexico)……the big blue Pacific Ocean protecting to the West……the massive cold Atlantic Ocean to the East…you wanna talk about MOATS now that’s a maot!....the worlds best and most technologically advanced army and nuclear arsenal…….the best and brightest research universities and access to worlds best and brightest people…..the worlds reserve currency…..not terrible demographics…I could go on…..I literally laugh every time I hear someone peddling the impending end of US global dominance..…..especially the talk about China …take what I just listed above and apply that filter to China’s set of cards……..ok have you done that yet USA doom talkers and China pumpers!…..shut the F up and start singing the national anthem right now or get outa of here

[Gregmal]

In an ominous sign, Ford raises prices of their Lightning pickups trucks, citing increased costs. We must do everything in our power to ensure affordability of tricked out trucks for the masses. Not only is it a quality of life issue, but the climate depends upon it!

[Parsad]

On 8/6/2022 at 10:05 AM, changegonnacome said:

Correct….Jamie Dimon nailed it not so long ago in some speech I saw and I’ve never forgot and never will…..the USA has the best hand of cards ever dealt a nation ever. Period.   .…..…..energy and food independent…the best economic system..….wonderfully friendly neighbors to the North (Canada) & South ( Mexico)……the big blue Pacific Ocean protecting to the West……the massive cold Atlantic Ocean to the East…you wanna talk about MOATS now that’s a maot!....the worlds best and most technologically advanced army and nuclear arsenal…….the best and brightest research universities and access to worlds best and brightest people…..the worlds reserve currency…..not terrible demographics…I could go on…..I literally laugh every time I hear someone peddling the impending end of US global dominance..…..especially the talk about China …take what I just listed above and apply that filter to China’s set of cards……..ok have you done that yet USA doom talkers and China pumpers!…..shut the F up and start singing the national anthem right now or get outa of here

 

This is all true, but this type of attitude also leads to complacency. 

 

China's GDP 20 years ago 1.5T...China's GDP today 18T.  India's GDP 20 years ago 0.5T...India's GDP today 3.5T.

 

US GDP 20 years ago 10.5T...US GDP today 23T.

 

Outside of politics and freedoms, if you have money, the lifestyle in China and India is as good or better than the lifestyle in the US.  

 

It would just take one reasonable Chinese President and one reasonable Indian Prime Minister, who would agree to work together and form a free trade agreement, to change the entire economic dynamic of the world. 

 

The U.S. has the advantage, but they are going to have to keep working damn hard to keep that advantage.  Charlie Munger called it a decade ago when he said, "We may have witnessed the apex of a great civilization."

 

Cheers! 

 

I've always invested in North America, but I'm small enough to do so.  Larger investors and institutions will have to look abroad as the global economy grows.  

[CorpRaider]

Jack Ma thought his life was as good as that of Bezos or Musk until he learned it wasn't.

[Parsad]

1 minute ago, CorpRaider said:

Jack Ma thought his life was as good as that of Bezos or Musk until he learned it wasn't.

 

That's where politics and freedoms come in.  That being said, do you think Trump feels like Jack Ma today?  

 

It also wouldn't take much for politicians in the U.S. to go after Bezos or Musk.  We've seen it before many times under anti-competition initiatives or practices.  Any company gets too large, and the U.S. government goes after them.

 

Cheers!

[Gregmal]

What I want to know is how to gamble on tomorrows CPI. It seems “the market” is “hanging in the balance”. Investors are “bracing themselves” for this significant short term event that again tells us what garbage calculation determined what prices were a month ago vs 13 months ago. How do we best prepare for a “monster” 2-3% up or down move on such momentous news? Buckle up folks! This is what long term investing is all about!

Edited August 9, 2022 by Gregmal

[changegonnacome]

44 minutes ago, Parsad said:

This is all true, but this type of attitude also leads to complacency. 

 

True - I never underestimate the ability of people/societies to clutch defeat from the jaws of victory. 

 

My point is/was that if you could choose a set of strategic cards to be dealt with as a country/economy in geopolitics........the USA has just about the best set of cards out there, hands down not even close.......now could the USA f-it up........for sure it could .....and maybe its in the process of doing so.....hard to know.....hit me up in 40 years and we'll see

[Spekulatius]

18 hours ago, Parsad said:

Outside of politics and freedoms, if you have money, the lifestyle in China and India is as good or better than the lifestyle in the US.  

 

this is not correct. to have the same life style than I currently have in China, I would need to earn much more money than I do currently in the US.

 

Just a simple example - to own a free standing house with one acre of land around it 30 miles of a larger city is virtually impossible in China. Many other things are more expensive as well (cars etc).

 

Then there is still pollution, lack of freedom and many other intangibles.

[Viking]

57 minutes ago, Spekulatius said:

this is not correct. to have the same life style than I currently have in China, I would need to earn much more money than I do currently in the US.

 

Just a simple example - to own a free standing house with one acre of land around it 30 miles of a larger city is virtually impossible in China. Many other things are more expensive as well (cars etc).

 

Then there is still pollution, lack of freedom and many other intangibles.

i have 2 daughters… would their opportunity set be the same if they lived in India or China today (or would they be subservient to the males in family or at work)? What about LGBTQ community? Do they have the same life/opportunity set in India or China? (They might..l i just do not know). How do Uyghurs in China feel these days? How well are Muslims getting on in India these days? What minority group is going to be targeted next? 
 

The eye opener for me, and i hate to sound like a broken record, was watching how China handled the outbreak of covid. It seared in my brain the core differences between living under an authoritarian system and living in a liberal democracy. Liberal democracies are flawed. But what i saw happening in China made my skin crawl. It was horrific and frightening. It made me appreciate the wonderful gift that me and my family have been given - the privilege of living in a flawed liberal democracy. I remind my kids of this fact lots. 
 

 

[crs223]

28 minutes ago, Viking said:

the privilege of living in a flawed liberal democracy

Great points.  Thank you.  Not only great points but what a welcome relief from 10 years of “right vs left” vitriol.  Imagine if the news media and politicians spoke like this.

[Guest]

2 hours ago, Spekulatius said:

this is not correct. to have the same life style than I currently have in China, I would need to earn much more money than I do currently in the US.

 

Just a simple example - to own a free standing house with one acre of land around it 30 miles of a larger city is virtually impossible in China. Many other things are more expensive as well (cars etc).

 

Then there is still pollution, lack of freedom and many other intangibles.

 

Spek is correct here. If what Sanj is saying were true, you would see a lot of migration from the US to China and India. I see the opposite of that. 

[matthew2129]

As seen on twitter:

 

[james22]

I was told we've ZERO inflation.

[Gregmal]

If you are relying on the corrupt officials and media to tell you everything you’re fucked and have no hope. If you really want answers all you gotta do is go out in the real world and keep your eyes open. 

[Parsad]

9 hours ago, Spekulatius said:

this is not correct. to have the same life style than I currently have in China, I would need to earn much more money than I do currently in the US.

 

Just a simple example - to own a free standing house with one acre of land around it 30 miles of a larger city is virtually impossible in China. Many other things are more expensive as well (cars etc).

 

Then there is still pollution, lack of freedom and many other intangibles.

 

You also have three times as many people living in each of Beijing and Shanghai compared to New York.

 

Do you remember what pollution was like in Los Angeles in 1970-1980?  I do!  Los Angeles air quality is better today than it was 50 years ago.  

 

With more and more electric cars and efficient heating/cooling sources, China's air quality will slowly improve.

 

6 hours ago, stahleyp said:

 

Spek is correct here. If what Sanj is saying were true, you would see a lot of migration from the US to China and India. I see the opposite of that. 

 

It's far harder to immigrate to China than the U.S.  Thus the numbers you see.  Nothing to do with quality of life or business.  Cheers!

[james22]

 

[Guest]

14 hours ago, Parsad said:

It's far harder to immigrate to China than the U.S.  Thus the numbers you see.  Nothing to do with quality of life or business.  Cheers!

 

 

Hmmm, I don't know if I buy that. How many people then move from China to the US and back to China? Or India to the US back to India?

 

My wife is Indian. I know at least one person that talked about moving back to India. She went back for a visit and...decided against it. How many do you know that have moved to India or China from the US or Canada?

 

 

[rkbabang]

23 minutes ago, stahleyp said:

 

 

Hmmm, I don't know if I buy that. How many people then move from China to the US and back to China? Or India to the US back to India?

 

My wife is Indian. I know at least one person that talked about moving back to India. She went back for a visit and...decided against it. How many do you know that have moved to India or China from the US or Canada?

 

 

 

I do.  I'm an engineer, so I've worked with quite a few people from India over the years.  One guy I worked with for about 10 years before he moved back to India.  He had talked about it for some time, but after his kids spent a couple of years in school, he moved back.  He said he didn't like how his children were being "Americanized".    That was about 7-8 years ago, I still talk to him from time to time and he says he's happy he made the move back.  I also worked with a guy from Pakistan who moved back to Pakistan because he didn't like living in America.   I don't understand it, but everyone is different.

 

[mcliu]

30 minutes ago, stahleyp said:

 

 

Hmmm, I don't know if I buy that. How many people then move from China to the US and back to China? Or India to the US back to India?

 

My wife is Indian. I know at least one person that talked about moving back to India. She went back for a visit and...decided against it. How many do you know that have moved to India or China from the US or Canada?

 

 

I think that's true. Probably why Japan also do not have many immigrants.

 

There is a term for returning Chinese, it's a significant #: https://en.wikipedia.org/wiki/Haigui

 

I think the lifestyle of the middle/upper-middle class in China is better than the lower/lower-middle class in America, so there's less incentive to emigrate and start-over.

[mcliu]

On 8/10/2022 at 8:41 AM, Spekulatius said:

Just a simple example - to own a free standing house with one acre of land around it 30 miles of a larger city is virtually impossible in China. Many other things are more expensive as well (cars etc).

Suburbanization is largely an American phenomenon though.

Many people prefer living in denser communities and be walking distance to shops/groceries instead of driving everywhere.

 

I think many upper-middle class Chinese that reside in cities own cottages/country houses in the rural areas outside of the cities, typically the villages that their families were originally from.

[ERICOPOLY]

On 8/11/2022 at 7:36 AM, rkbabang said:

 

I do.  I'm an engineer, so I've worked with quite a few people from India over the years.  One guy I worked with for about 10 years before he moved back to India.  He had talked about it for some time, but after his kids spent a couple of years in school, he moved back.  He said he didn't like how his children were being "Americanized".    That was about 7-8 years ago, I still talk to him from time to time and he says he's happy he made the move back.  I also worked with a guy from Pakistan who moved back to Pakistan because he didn't like living in America.   I don't understand it, but everyone is different.

 

 

Getting to be a while back now, but about 20 years ago I met some Indian engineers at Microsoft who were complaining they could not afford servants on the US incomes and wanted to go back to India where they could have household servants despite their lower incomes.

 

Edited August 17, 2022 by ERICOPOLY

[rkbabang]

10 hours ago, ERICOPOLY said:

 

Getting to be a while back now, but about 20 years ago I met some Indian engineers at Microsoft who were complaining they could not afford servants on the US incomes and wanted to go back to India where they could have household servants despite their lower incomes.

 

 

Yep, drivers as well.  You have to drive your own car unless you are very very rich in the US.

[Viking]

Nice to see Europe has its energy issues resolved. After all, winter is coming. Inflation of 18% in the UK in 2023? Phew… i was getting worried there for a while…

 

My guess is the energy crisis in Europe is no where near resolved and with each passing month the news will likely get worse. Sounds like the UK will have gas… just at astronomical prices. Just like a Monty Python movie we keep hearing… nothing to worry about… “just a flesh wound.” Meanwhile, still no plans to meaningfully pivot government energy policy (short term to address the supply or demand sides of the problem). 
 

And with Europe vacuuming up world energy/LNG supplies this will simply push the shortages to other regions. Anyone who understands how all of this is going to play out over the next 6-8 months should get very rich  (I have no idea.)

—————

UK inflation will hit 18% in early 2023, says leading bank Citi
- https://www.theguardian.com/business/2022/aug/22/uk-inflation-will-hit-18-per-cent-in-early-2023-says-leading-bank-citi-gas-electricity

 

Inflation in the UK will hit 18% early next year as consumers count the cost of the deepening energy crisis, one of the world’s biggest banks has predicted.

 

The US financial services group Citi said it expected the consumer prices index to breach 18% in the first quarter of 2023, while the retail prices index inflation rate would soar to 21%.

 

Citi’s prediction is significantly higher than previous modelling of the impact of rising costs. Earlier this month the Bank of England said it expected inflation to reach 13% by the end of the year, while the Resolution Foundation thinktank has forecast it could reach as high as 15% by early 2023.

 

Asked about the possibility of blackouts this winter, Downing Street downplayed concerns. A No 10 spokesperson said: “Households, businesses and industry can be confident they will get the electricity and gas that they need over the winter. That’s because we have one of the most reliable and diverse energy systems in the world.”

 

She said consumers should not panic or feel they should cut down on energy use. “These decisions, in terms of energy consumption, remain decisions for individuals. But what I’m saying is that households, businesses and industry can be confident that they will have the electricity and gas that they need.”

Edited August 23, 2022 by Viking

[thowed]

Which sounds great, except she forgot to add, 'IF they can afford it'....