Capitalism’s over: The man who made millions betting economy would never recover

I think he's right that we're headed to neo-feudalism. Already in Canada the price of housing has spiked so high and so fast that regular people pretty much have no hope in hell of buying anything without parent help (ie. dynastic wealth).

Wasn't even 20 years ago that housing was affordable by working class people.

We seem very far away from any sort of political shift that would change this.

Yes and lots of people made millions buying and selling crypto currencies, or stocks or whatever. Making a couple million is hardly prove that your 'grand theory' is correct. As Talib and others have long pointed out with traders, there is an element of randomness. At the same time correctly identifying the effect from the symptoms might be useful, but it doesn't mean you understand the root cause.

Total nominal spending is a function of central bank action. What he actually bet on was that central bank failed to properly react to the situation and let a massive nominal spending gap develop. Monetary economics predicts very well what happens when you have nominal spending gap and that is exactly what happened in 2008 and beyond.

Recovery was massively better if the places where the central banks had nominal spending on trend and much worse the bigger the spending gap was.

Some Keynesian economist might argue that central banks couldn't not do anything if interest rates were low. This is an old Keynesian believe that somehow stuck in the minds of many older influential economists and had still been around in central banks operational doctrines. Of course many of economists both before and after Keynes never believed this. Central banks models were based on New Keynsian style economic modeling that were interest rate depended and relied on past data, rather then forward looking indicators. Central banks were literally driving by looking in the mirror while having a steering-wheel that only worked under certain conditions. Even in New Keynesian economics this had been criticized but not enough for it to make it into conservative bank operations (with few exceptions). And even those famous economists who were critical continued their focus on interest rate.

This led central banks to misunderstand the crisis, the realized the spending collapse to late. Real-interest rates collapsed and nominal interest rates were close to zero breaking many central banks models. Leading to nominal spending shortfall and the exact sort of problems described in the article.

The idea that this happened because of inequality makes no sense. If that was true then post-2008 we should have seen a clear dataset where more equal countries had better rediscover then more unequal countries (or monetary zones). However no such correlation exists to my knowledge.

Just like in 1929-1931 all kinds of things were blamed (and are often still blamed) but by now the majority of economists agree that fundamentally about a nominal collapse and a failure of the central bank. Even central banks have admitted it. It probably gone take another 50 years but eventually they will admit that they were mostly at fault in 2008 as well. Until then everybody can parade around their hobby horse.

Non of this of course says anything about if in-equally is good or bad. Or if such crisis make inequality worse, they very well might. My assertion here is simply that overall economic recovery measures are not dedicated by inequality rates.

Marxists predicted that capitalism will fall in few years in 1910s, 1920s, 1930s, 1940s, 1950s,1960s,1970s.

For some unexplainable reason, predictions of dramatic changes in systems with billions of variables always fail.

> “My grand, macro thesis is that real interest rates have to stay low, and that’s because the rich have all the wealth and like saving,”

I feel I'm the choir and this guy is the preacher, leaning as I do towards full-on socialist, so I'd like to hear a counter argument from someone who believes the opposite.

Firefox reader view beats the paywall