We're seeing more and more economic focused posts making it to the front page lately. We're all thinking about it due to high inflation and few options to protect our cash savings. That said, the quality of HN comments regarding economics tend to be, in my experience, quite low. I'd suggest anyone interested go seek out more qualified analysis beyond a weekend HN thread full of people like me regurgitating half understood economics theories we've absorbed over the last two years.
Inflation topics can be particularly misleading to new investors who haven’t yet realized that nobody actually “invests” in cash across decades like this example. At least not if they have basic financial education.
It can also confuse new investors who might not realize that USD-denominated assets don’t lose value like USD itself. This may seem obvious to anyone who has studied Econ or investing, but it’s actually a very common misunderstanding among people who are new to the concept of inflation. Unfortunately, this misunderstanding is often misused to scare people into thinking their only options for avoiding inflation are gold or cryptocurrency, which isn’t true at all.
For 99% of us working our comfortable tech jobs in stable countries, it’s more enlightening to consider how the author would have done with S&P 500 or gold (hint: Gold loses by a lot).
To clarify - this isn't to say that non USD denominated assets don't lose value if compared to the currency its denominated right?
That is, I could replace 'USD' with any other currency in both occurrences in the phrase: `USD-denominated assets don’t lose value like USD itself.` and it would still be true, right?
I recently purchased a subscription to The Economist and have been listening to the top stories on a daily basis. That said, it seems to be more politics than economics.
That paper's misnomer aside, you probably don't want to listen to economists to learn how economies work. The soft sciences tend to get a bad rep but economists tend to be the ones most resembling ideological fan fiction.
This is playing out currently, quite openly, as the FTC investigates whether companies have raised prices more than costs have risen from inflation. It's becoming increasingly clear that the academic economic consensus is, simply, disconnected from how markets actually operate. For instance, while each day has brought a new study of consolidated companies engaging in pandemic price gouging, academic establishment luminaries like Larry Summers continue to argue that antitrust is unrelated to inflation.
Larry Summers was 100% right about impending inflation. He’s been totally vindicated. I’m suspicious of where you are getting your information and suspect it’s politically motivated.
Larry Summers has been wrong numerous other times and this is pure confirmation by settling on one where he hasn't been. Broadly this is the basis for macroeconomics jumping from one "analyst" to another with the benefit of hindsight. Just look at how many diff predictors for recessions there are - the yield curve was supposed to be the best one. When a recession does occur, economists will prove to the one that was correlated to predict the next one.
It’s quite the opposite. Economics is generally the most rigorous of the social sciences.
Even the “worst” discipline, macroeconomics, tends to yield high quality predictions. Larry Summers was screaming from the rooftop about how the Covid stimulus would result in inflation
Microeconomics maybe. Macro is highly speculative since there is borderline no basis for experimentation and inference, and every incidence has no precedence. This is very broadly understood and accepted by economists themselves
Where would I suggest for you to get a real education in economics or where would I suggest you go to become another armchair economist like me? :)
Personally I'd stick with Boglehead type advice and focus on your career(assuming you're in tech). My day job is the only thing that's ever consistently generated wealth for me.
I am in a special situation having to make up for lost time being out of the market and being divorced, so I am trying riskier things that I really wouldn't recommend for anyone else.
Once you go down the rabbit hole of trying to understand macroeconomic trends and betting accordingly, well, it becomes rather distracting. I can't recommend it.
If you really want to 'go there' well... I don't know. I follow a random collection of FinTwit folks. Lately I like Doomberg and "The Maverick of Wall Street". I also follow folks like Mohamed El-Erian, Buffett/Munger and Jeremy Grantham
Haha, well, my undergrad was actually Economics and I assure you I am still an armchair economist!
Reading the annual notes / investment updates by certain more prolific managers can be useful, but they all have their own bias and honestly its not particularly insightful from an economics perspectives. (More finance than economics)
