openpgp4fpr:E0C3497126B72CA47975FC322953BB8C16043B43
Musk may blame any problems on a made up cyberattack again, painting himself and his political associations as victims of a censorship campaign and denying the real technical issues that have been appearing and worsening since his takeover and which might otherwise scare away even more advertisers.
Since the US election I have been hoping for a fallout with Trump as Musk’s Icarus moment, but I would be willing to forego the symbolism. I like your direct approach to the matter.
Please, I beg you — South Africa has enough problems as it is. Can he not go to Mars instead? He has always been very enthusiastic about the planet and he would be safe from the “woke virus” he so dreads — a win for everyone?
The price of goods going down is not contained to one country. […] Deflation would be global.
That contradicts both present reality and future expectations as far as I understand both.
In the past two years, China has been grappling with deflationary tendencies at the same time that much of the world has been experiencing extraordinary inflation.
China’s current deflationary tendencies stem from a combination of relatively low domestic demand and an ongoing decrease in exports. This decrease in exports was mostly caused by US protectionism, which is set to expand in both rates and scope under Trump.
Looking forward, the divergence I aluded to –deflation in China, inflation elsewhere– seems poised to continue. Further protectionism and the looming tariff war –not only with China, but possibly with Canada, Mexico and others– are expected to both fuel inflation in the United States and further reduce imports of Chinese goods. That would strengthen deflationary tendencies in China unless the government pulls off a stimulus package for their domestic economy more effective than the ones deployed thus far.
Thank you for expanding on your point. What I did not and still do not understand is the following part of your original comment:
China owns large parts of the debt of the US. Deflation makes them stronger.
Deflation in China –that’s where deflation might occur or even be occuring– would not make the US Treasuries held by China more valuable, would it? Only deflation in the US, with the dollar appreciating, would have that effect, right?
I think we both agree that capitalist logic is inherently extractive, exploitative and generally unhealthy. What I’ve been trying to point out is that we should not cherish deflationary tendencies in China or seek deflation in our own economies as a solution of sorts to the cost of living crisis, but rather pursue the power to increase our wages to at least match our ever rising productivity. In my opinion, unionizing –hard as it is– is more feasible than changing our monetary system –necessary and desirable as that would be– or overcoming capitalism.
Maybe we should see increasing prices for energy… And let “the free and open market” fully control how much consumers pay for fossil fuels at the pump?
Although I’m all for letting free market advocates get fisted by the invisible hand they worship, high energy prices have arguably contributed to the wave of obnoxious populism sweeping the world. I’m not saying we should keep fossil fuels to cater to the angry and fearful; I’m saying the transition should be more managed, because the sudden economic disruption you suggest is politically fraught.
My understanding is that a slight and stable increase in the money supply is beneficial regardless of the monetary system in use, because it incentivizes economic activity. That said, I’m only somewhat familiar with our current fractional-reserve banking system and don’t know enough about other systems, historical or hypothetical, to present my understanding as fact.
If money should never become an asset worth holding, how can inflation be better than deflation for the working class?
It’s deflation that turns money into an asset worth holding and thus slows down economies. Too much inflation isn’t good either, for different reasons. A slight and stable inflation is the sweet spot.
Proportionately, the rich hold a lot more money assets than the poor, who generally don’t hold any or very little.
Indeed, the rich do proportionately hold a lot more money than the poor, but it isn’t much. The rich mostly have shares in corporations, bonds and real estate.
Inflation is generally worse for workers than for the rich because the latter have more pricing power. If both your living expenses and your income after taxes increased by 20%, you’d even end up with more money than before, assuming your living expenses were a fraction of your income. Unfortunately, prices haven’t risen equally; the cost of living increase has generally outpaced real wage growth. The rich have been able to set higher prices; workers haven’t been able to extract high enough wage raises.
Neither high inflation nor deflation are good for workers. What workers need is pricing power through strong unions and political support.
Let’s say a company makes X amount in profits in 2024, and everyone—employees, shareholders, stakeholders—are happy and well-compensated. Why should the expectation be that profits must increase in 2025, even if the company is already performing well?
Many of the products and services that businesses depend on will or might raise in price. This is by design; most central banks target a low inflation rate, often around 2%. Without an increase in profits, raising prices on inputs will eat away at a business’ profit margin.
China owns large parts of the debt of the US. Deflation makes them stronger.
I don’t follow you here. How does deflation in China make the debt of the US stronger? Am I understanding you wrong?
If the renminbi appreciated over time against the US dollar, dollar-denominated debt held by the People’s Republic would yield less and less, wouldn’t it?
“The economy” in this instance being a playground for the rich.
People won’t stop paying for food or rent just because their money might be worth a little more tomorrow.
Indeed, people won’t stop paying for everyday necessities, but the economy consists of more than just individual people: there’s the state and there are businesses too. You conflate the latter with “the rich”, which is generally true for corporations, but corporations are not the only form of business; there are cooperatives, partnerships, and others which can distribute profits more fairly. In any case, deflation affects all businesses, including fair ones, and the state itself. As another commentator suggested, money is meant to change hands and should never become an asset worth holding.
So what should be done to the country that blew up Germany’s oil pipes?
Thank them, whomever they were, for forcing Germany to finally move on from an economic model that was untenable not only for her international partners, but for her own population. Had the Nord Stream pipelines not been so severely damaged, the prospect of cheap industrial inputs may once more have tempted the business establishment to sell out Germany’s partners and public interest for higher private margins; now, even if the upcoming election should yield a government friendlier towards Russia, rebuilding the Nord Stream pipelines –and with them a Trojan horse that had been looming over the European project– would be impracticable.
To my knowledge, Zelenskyy only expressed support for Israel after October the 7th, 2023, over a year and a half after Russia launched its full scale invasion of Ukraine — a year and a half during which Hamas, Islamic Jihad and the Palestinian Authority could have condemned Russia’s war against Ukraine. They didn’t, presumably, for the same reason Zelenskyy has expressed support for Israel: to avoid antagonizing their allies, morals be damned. Given their dire situation –both Ukraine and the Palestinians rely heavily on their respective allies for military and diplomatic support–, I think we ought to give them a pass. If you disagree, at least apply the same logic to both and condemn them equally.
If building them becomes difficult because of missing materials, the prices would rise, which is not happening at the moment.
Solar panels have indeed become cheaper and cheaper, and you are right to argue that the materials used to build solar panels are priced in. However, solar requires some infrastructure besides the panels themselves, such as inverters and storage, and that infrastructure needs additional materials, some of which are expensive. Copper, for instance, surged in price in 2020, and there is not enough investment to expand mining operations despite the great profits it has been yielding. This is an ongoing saga in the mining industry, with BHP attempting to take over Anglo American in part for its copper portfolio.
I am not arguing against solar; I just think it cannot be scaled to the extent necessary to cover most of our current and projected future electricity consumption. To get rid of fossil fuels and generate ever more electricity for EVs, the AI black hole and goddamn cryptocurrencies, I think we will need nuclear. I wish we would build more public transportation, break from the AI spell and ban cryptocurrencies, but I’m not hopeful. In any case, the pace solar has picked up these past years is very encouraging and we should do what we can to push it further.
I would characterize Tesla stock not as a pump & dump scheme anymore, but as a bet on Musk’s position to extract concessions from his political connections. He has got his way already with Trump planning to end EV subsidies that mostly benefited Tesla’s competitors (although Trump may have intended to do so anyway) and he might yet push against regulation that would threaten Tesla’s market position in the US, like federal charging standards. He may also get Trump to impose harsher tariffs on Chinese electrical vehicles than he otherwise would, although such tariffs enjoy bipartisan support.
The article you linked to is from 2015 and refers to the original Darfur genocide, unless I’m missing something.
Indeed. I don’t understand why so many people and media organizations that pay attention to Gaza don’t cover Sudan too (they may care, but they barely show it). There’s suffering on a similar scale, foreign powers causing and broadening that suffering and global repercussions through migration, disease, weapons smuggling and radicalization.
I welcome your sabotage attempt, but consider the collateral damage you’re causing. I sprained a few neurons reading your comment.