Generational Dynamics World View News

[Tom Mazanec]

There was an episode of King of The Hill where snow starts falling and everybody except Mrs. Hill panics: "Powdered ice is falling from the sky! It's the end of the world!" But Peggy says "Don't worry, I know what this is! It is called 'snow'. It is not dangerous."

[John]

** 05-Mar-2021 World View: The Conundrum of 2021 Economic Growth

There is a narrative among economists that conflicts a little with
what I would expect from Generational Dynamics theory, and so it will
be worth watching carefully to see how this tension between narrative
and theory plays out during the rest of 2021.

All the highly respected economic gurus that I seen on tv these days
seem to agree to the following narrative:

• The beneficial effects of vaccines are much greater than
  anyone believed possible a year ago, or even a couple of months ago,
  because of operation warp speed.
• A large number of people have either been vaccinated or they've
  already had Covid, and so a lot people (the Neanderthals) are opening
  up businesses again and returning to work.
• As the weather warms in the spring, this trend will accelerate,
  and more people will be outside. (However, this trend could reverse
  in the summer if people gather indoors to enjoy air conditioning.)
  (This trend also won't apply to South Africa, South America or
  Australia, where it will be winter.)
• There was supposed to be a long, dark winter, but this morning's
  jobs report shows that the economy is booming. This is especially
  true of the leisure and hospitality sectors.
• After the Democrats' $1.9 trillion massive stimulus bill is
  passed, and $1,400 stimulus checks go out to everyone, then people
  will have a lot more money to spend, especially if they're going back
  to work.
• There is an enormous pent-up demand from consumers who have been
  unable to travel or go shopping, for a year.
• Therefore, there will be an explosion in retail sales, in travel
  and hospitality, and in other sectors.
• Therefore, there will be an explosion in economic growth in the
  last half of 2021.
• Therefore, there will be a rapid spike in inflation by the end of
  this year.
• In fact, I heard one "expert" go on a long rant this morning,
  saying that he has only one fear, inflation: "My greatest fear is that
  Jerome Powell is wrong about inflation, and that it will rear its ugly
  head, and once it starts to take off it will be like a momentum trade
  and keep growing faster and faster, and the Fed will be forced to
  raise interest rates as much as, God forbid, one percent, and that
  will hurt stock prices."

So that's the mainstream narrative among the "experts." As I've
written many times, the "experts" have been consistently wrong since
2003, when I started keeping track. For the last 70 quarters, the
"experts" predicted that there would be inflation or super-inflation
in the following quarter, and for 70 quarters they've been wrong every
quarter. And now it's the same thing all over again.

It would be VERY nice if even one of these "experts" at least
acknowledged that they've been wrong for the last 70 quarters, and
explained why "this time it's different" this quarter. But they never
do.

I heard one person say, "I've always known when the economy is flooded
with money, then inflation will go up. That's what's going to happen
now." That's the knee-jerk view, but it's obviously not true. Since
2007, the economy has continually been flooded with money, but
inflation has not gone up. The person who said this is an idiot.

You know, I used to think that the amount of money in the economy at
least had some effect on the inflation rate, but as time has gone on,
I increasingly believe that the amount of money has absolutely nothing
to do with the inflation rate, at least in the American economy.

The inflation rate is not a monetary phenomenon. It's a generational
phenomenon. It's not the Fed that affects the inflation rate. It's
the people, the people's mood, that affect the inflation rate.

Since 2007 I've been talking about the velocity of money, which has
been plummeting, indicating no inflation, despite all the
money-printing. A falling velocity of money means that people aren't
spending money, so there's no inflation.

But let's try to explain this directly, without resorting to the
velocity of money.

Last year, the savings rate was the highest in history. That means
that people were not spending money. The "experts" are saying that
was caused by the pandemic, and this spring it will all reverse, and
people will start spending money explosively because of pent-up
demand.

In my opinion, any belief like that is crazy. Families that have
become accustomed to saving money for a rainy day are not suddenly
going to become profligate. Anyway, the savings rate has been growing
before the pandemic.

Furthermore, most of the stimulus checks are going to go towards
paying off debts -- credit card bills, loans, unpaid rent, and so
forth. Paying off debt is the same as saving, so for that reason
alone the savings rate will not significantly decrease.

In this generational Crisis era, the public mood is far different than
it was in the 1990s Unraveling era or the 1970s Awakening era. In
those days, the public mood was to expect full employment and
increasing salaries. The savings rate was low, especially for young
people, because there was no reason to save.

Today, millions of people went bankrupt or lost their homes duing the
2008 financial crisis, and they are still in shock from that
experience. And of course almost everyone is still in shock from the
pandemic lockdowns. To even suggest that there's going to be an
explosion in spending by young families who are in shock from the
pandemic and the 2008 financial crisis is ridiculous. They know
something that people didn't really know in the 1990s -- that
something new and catastrophic could happen again at any time, and
they'd better be financially prepared. That's why the public mood is
different during a generational Crisis era.

The assumption of an explosion in consumer spending is the lynchpin of
the conclusion of the narrative that there will be inflation or
superinflation by the end of the year.

That's the conundrum. It's going to be very interesting to watch for
the rest of the year to see which turns out to be right: The
mainstream narrative or Generational Dynamics theory. Of course I'll
be betting on the latter, since it's always been right in the past.

[Cool Breeze]

The Texas arctic weather disaster is a great example of the lack of foresight and inability of most people to look beyond the scope of their own experiences to be prepared for rare but not impossible events that history shows will occur at some point.

Apparently the last time Texas got that cold for that long was in the late 1890's and possibly the late 1940's.

So for your average Texan, who did not live to see such weather in Texas as they were not around to see the previous arctic weather events, the idea of subzero temperatures coming to their home and staying there for days was not something they were ever concerned about. Yet it happened as it happened before and will happen again.

Humans are unable to learn beyond the scope of their own personal lives and experiences, which is why the 80 year cycle is human nature.

From The Fourth Turning, page 317, How you Should Prepare:

Reflect on what happens when a terrible winter blizzard strikes. You hear the weather warning but probably fail to act on it. The sky darkens. Then the storm hits with full fury, and the air is a howling whiteness. One by one, your links to the machine age break down. Electricity flickers out, cutting off the TV. Batteries fade, cutting of the radio. Phones go dead. Roads become impassible, and cars get stuck. Food supplies dwindle. Day-to-day vestiges of modern civilization-bank machines, mutual funds, mass retailers, computers, satellites, airplanes, governments-all recede into irrelevance. The storm strips you bare, reducing your world to a small number of elemental forces-some bad, others good. On the bad side are the elements of nature. On the good are whatever scraps of social cohesion you can muster, from your own family's survival skills to neighbors who pitch in and share, to a family who lends you a truck-mounted plow because you once helped them out in a pinch.

Picture yourself and your loves ones in the midst of a howling blizzard that lasts for several years. Think about what you would need, who could help you, and why your fate might matter to anybody other then yourself. That is how to plan for a saecular winter.

It's a good lesson for sure. Howling blizzard for years? I think the best is to be able to manage half a year and then make movement plans, if possible.

[Higgenbotham]

It's a good lesson for sure. Howling blizzard for years? I think the best is to be able to manage half a year and then make movement plans, if possible.

Interesting you say that. My plan has been to survive for a year, then take a look around and decide what to do from there.

[Cool Breeze]

** 05-Mar-2021 World View: The Conundrum of 2021 Economic Growth

There is a narrative among economists that conflicts a little with
what I would expect from Generational Dynamics theory, and so it will
be worth watching carefully to see how this tension between narrative
and theory plays out during the rest of 2021.

All the highly respected economic gurus that I seen on tv these days
seem to agree to the following narrative:

• The beneficial effects of vaccines are much greater than
  anyone believed possible a year ago, or even a couple of months ago,
  because of operation warp speed.
• A large number of people have either been vaccinated or they've
  already had Covid, and so a lot people (the Neanderthals) are opening
  up businesses again and returning to work.
• As the weather warms in the spring, this trend will accelerate,
  and more people will be outside. (However, this trend could reverse
  in the summer if people gather indoors to enjoy air conditioning.)
  (This trend also won't apply to South Africa, South America or
  Australia, where it will be winter.)
• There was supposed to be a long, dark winter, but this morning's
  jobs report shows that the economy is booming. This is especially
  true of the leisure and hospitality sectors.
• After the Democrats' $1.9 trillion massive stimulus bill is
  passed, and $1,400 stimulus checks go out to everyone, then people
  will have a lot more money to spend, especially if they're going back
  to work.
• There is an enormous pent-up demand from consumers who have been
  unable to travel or go shopping, for a year.
• Therefore, there will be an explosion in retail sales, in travel
  and hospitality, and in other sectors.
• Therefore, there will be an explosion in economic growth in the
  last half of 2021.
• Therefore, there will be a rapid spike in inflation by the end of
  this year.
• In fact, I heard one "expert" go on a long rant this morning,
  saying that he has only one fear, inflation: "My greatest fear is that
  Jerome Powell is wrong about inflation, and that it will rear its ugly
  head, and once it starts to take off it will be like a momentum trade
  and keep growing faster and faster, and the Fed will be forced to
  raise interest rates as much as, God forbid, one percent, and that
  will hurt stock prices."

So that's the mainstream narrative among the "experts." As I've
written many times, the "experts" have been consistently wrong since
2003, when I started keeping track. For the last 70 quarters, the
"experts" predicted that there would be inflation or super-inflation
in the following quarter, and for 70 quarters they've been wrong every
quarter. And now it's the same thing all over again.

It would be VERY nice if even one of these "experts" at least
acknowledged that they've been wrong for the last 70 quarters, and
explained why "this time it's different" this quarter. But they never
do.

I heard one person say, "I've always known when the economy is flooded
with money, then inflation will go up. That's what's going to happen
now." That's the knee-jerk view, but it's obviously not true. Since
2007, the economy has continually been flooded with money, but
inflation has not gone up. The person who said this is an idiot.

You know, I used to think that the amount of money in the economy at
least had some effect on the inflation rate, but as time has gone on,
I increasingly believe that the amount of money has absolutely nothing
to do with the inflation rate, at least in the American economy.

The inflation rate is not a monetary phenomenon. It's a generational
phenomenon. It's not the Fed that affects the inflation rate. It's
the people, the people's mood, that affect the inflation rate.

Since 2007 I've been talking about the velocity of money, which has
been plummeting, indicating no inflation, despite all the
money-printing. A falling velocity of money means that people aren't
spending money, so there's no inflation.

But let's try to explain this directly, without resorting to the
velocity of money.

Last year, the savings rate was the highest in history. That means
that people were not spending money. The "experts" are saying that
was caused by the pandemic, and this spring it will all reverse, and
people will start spending money explosively because of pent-up
demand.

In my opinion, any belief like that is crazy. Families that have
become accustomed to saving money for a rainy day are not suddenly
going to become profligate. Anyway, the savings rate has been growing
before the pandemic.

Furthermore, most of the stimulus checks are going to go towards
paying off debts -- credit card bills, loans, unpaid rent, and so
forth. Paying off debt is the same as saving, so for that reason
alone the savings rate will not significantly decrease.

In this generational Crisis era, the public mood is far different than
it was in the 1990s Unraveling era or the 1970s Awakening era. In
those days, the public mood was to expect full employment and
increasing salaries. The savings rate was low, especially for young
people, because there was no reason to save.

Today, millions of people went bankrupt or lost their homes duing the
2008 financial crisis, and they are still in shock from that
experience. And of course almost everyone is still in shock from the
pandemic lockdowns. To even suggest that there's going to be an
explosion in spending by young families who are in shock from the
pandemic and the 2008 financial crisis is ridiculous. They know
something that people didn't really know in the 1990s -- that
something new and catastrophic could happen again at any time, and
they'd better be financially prepared. That's why the public mood is
different during a generational Crisis era.

The assumption of an explosion in consumer spending is the lynchpin of
the conclusion of the narrative that there will be inflation or
superinflation by the end of the year.

That's the conundrum. It's going to be very interesting to watch for
the rest of the year to see which turns out to be right: The
mainstream narrative or Generational Dynamics theory. Of course I'll
be betting on the latter, since it's always been right in the past.

Neanderthals are part of the reason why Eurasians are more advanced than other peoples on the Earth, so it's funny that people keep using that as a pejorative. But I digress.

You are right about a couple of things here John:

1. They don't know what's going on.
2. Public mood does indeed have a major impact on the economy and inflation, but is one of a few major variables, and rears its head late because the mass man doesn't understand where we are going - he has been sated by what he is used to (dollars growing on trees, world reserve status, "they can do XYZ").

What you are totally wrong about:

From the above:

That's the knee-jerk view, but it's obviously not true. Since
2007, the economy has continually been flooded with money, but
inflation has not gone up. The person who said this is an idiot.

You know, I used to think that the amount of money in the economy at
least had some effect on the inflation rate, but as time has gone on,
I increasingly believe that the amount of money has absolutely nothing
to do with the inflation rate, at least in the American economy.

Inflation has gone up, oh yes it certainly has, but not in CPI measured "stuff". The rich's activities are majorly inflated (art, equities (biggest), health care, universities). Money Supply always has to do with it, at least in some way. I just told you where it manifested - think the entire picture, not just "Inflation is JUST CPI" - you fell for the trap.

Interestingly, velocity isn't necessarily connected to inflation either, because of the equation V = GDP/M2

GDP can be thought of as prices x transactions. Credit where it's due, MishTalk pointed this out. I don't even like the guy, but he is correct here, which again shows my love for critical thinking and analysis and not emotional baggage brought into debates:

MISH said:

Observations

Velocity can rise if prices fall if the number of transactions goes up.
Velocity can rise if prices stay the same and M2 goes down.
Velocity can fall if prices rise if M2 goes up
Velocity can fall if prices rise and the number of transactions drops.

Key Points

Prices can rise, fall, or stay the same, no matter what velocity does.
Velocity does not determine prices.
Velocity does not determine or even influence anything at all.

It turns out that V is this weird backfitted constant. What makes it even weirder is that "government spending" is included in GDP, lol!
---

Inflation will come when TRUST erodes and the common, mass man can't even deny the joke that is the US government and dollar anymore. Oh yeah, what is that valuable asset that doesn't require trust to send value? Hahaha, it's back again!

You're welcome.

[Cool Breeze]

It's a good lesson for sure. Howling blizzard for years? I think the best is to be able to manage half a year and then make movement plans, if possible.

Interesting you say that. My plan has been to survive for a year, then take a look around and decide what to do from there.

We're on the same page. Now if you just let that emotional baggage go, and you are right about the coming badness (though it won't be quite as bad as you think) you'll be thanking God for the guy you read on the internet that told you how valuable BTC really was and is.

I'll be taking in a drink with an umbrella in the sun in South America, and you know what, I'll buy you one too when you come down and we have all the fiat we desire to make local transactions because we have BTC as collateral, backing the stupid fiat that others take, because they didn't have the foresight to recognize the soundest money and network effect of all time.

[Higgenbotham]

It's a good lesson for sure. Howling blizzard for years? I think the best is to be able to manage half a year and then make movement plans, if possible.

Interesting you say that. My plan has been to survive for a year, then take a look around and decide what to do from there.

We're on the same page. Now if you just let that emotional baggage go, and you are right about the coming badness (though it won't be quite as bad as you think) you'll be thanking God for the guy you read on the internet that told you how valuable BTC really was and is.

I'll be taking in a drink with an umbrella in the sun in South America, and you know what, I'll buy you one too when you come down and we have all the fiat we desire to make local transactions because we have BTC as collateral, backing the stupid fiat that others take, because they didn't have the foresight to recognize the soundest money and network effect of all time.

Now that was funny. I can see you have a great imagination. If there's anybody here I would bet on, it would be Tim in his concrete bunker.

Here's the far more probable scenario, if Bitcoin has any value when you arrive in South America. A local strongman gets wind of the fact that you are purchasing things. He sends one of his men out to investigate. His men report back that they suspect you have a hidden asset. The local strongman orders your capture. If you don't know what comes next, the Guest from Chechnya will fill you in on the rest.

[FullMoon]

Yes Higg. That's what i was thinking. Odds are it won't be a minor downtime with opportunities for leisure. I also don't hope for the worst but something in between would be survivable. I did like the idea of finding a local girl in a well placed family in S America, if I was single. So you'd be marrying into wealth regardless.

[John]

6-Mar-21 World View -- Violence escalates dangerously in Myanmar / Burma

Consequences of a new Burma civil war

** 6-Mar-21 World View -- Violence escalates dangerously in Myanmar / Burma
** http://www.generationaldynamics.com/pg/ ... tm#e210306




Contents:
Violence escalates dangerously in Myanmar / Burma
International community calls for sanctions to end the violence
Ethnic Burmans vs the other ethnic groups
Generational analysis of crisis in Myanmar / Burma
Consequences of a new Burma civil war


Keys:
Generational Dynamics, Myanmar, Burma, Aung San Suu Kyi,
Rohingyas, Rakhine State, Burmans, Shan,
Kachin Independence Army, KIA

[JCP]

When are you going to release your Vietnam book?