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Comment by roenxi | Hacker News Reader

It is possible. But the evidence that is happening is relatively weak. The wealthy would struggle to consume anything more than they already do. A lot of commodity indexes suggest growth in the US has actually been stalled for a while (eg, energy, copper use are two metrics that don't look rosy to me).

Believing that economies like the US are growing often requires accepting beliefs like the economy being disassociated from the physical world. On the one hand, that is a defensible position. On the other it is stretching - some people care more about the physical world.

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What evidence over what timescales are we talking about? Demand for certain types of energy stalling can actually be evidence that economic growth is leading to energy efficiency improvements, and use of a primary metal mostly used in manufacturing stuff US companies import to sell obviously isn't as good a proxy for real physical world growth as more people in work earning more money to buy more goods.

Sure, things look drastically different if you're no longer working in your pandemic affected role, if you have a minimum wage skillset or if you've spent the last half century in Detroit, but that's entirely compatible with growth being unequal

To clarify, your point is that for economy to be growing one of the following must be true (or some mix of them)

1. There is increased consumption (as in, increased unlocking and using of energy and resources to fulfill human desires we already know) 2. There are new human desires being made and valued higher than just fullfilling the existing ones more, mainly in the non-physical domain of culture, social value etc. and (nowadays) mainly digitally

And you are skeptical about the second one because some people care about the physical world?

It seems unlikely that all this talk about "inequality" would stick if people were happy with virtual wealth.

Eg, am I supposed to care about inequality caused because some people don't have a Facebook account/access to the Facebook ad market/a stake in managing the company? The accounts are basically free anyway. I'm convinced that Facebook has generated a lot of value, but I'm sceptical that anyone cares about the inequality of its distribution.

Compare that to food, energy, etc, where it is easy to see how lack of access/no ability to influence the decisions made would cause screams to echo throughout the land. I think that is probably what people care about when they talk of "the economy".

It's possible that the economy in aggregate is still growing, but is increasingly dominated by a smaller number of sectors. Construction, software, and healthcare are probably booming, to an extent that the entire economy still grows even if travel, hospitality, retail, and a whole lot else is contracting.

The US is becoming more and more a technology based economy which is less reliant on physical factors.

What does wealthy people consumption have to do with inequality? The wealthy create wealth by investment, and there is a massive amount of investment going on in the past few years, yielding unheard of returns.

"The US is becoming more and more a technology based economy which is less reliant on physical factors. "

I don't think that's really true. There is a lot of physical stuff going on but it's being pushed out of sight and done by cheap labor. A lot of the shiniest companies wouldn't look that great if they didn't have this supply of cheap invisible labor.

Uhh it is absolutely true. The top 100 companies in the US by market cap are predominantly tech and healthcare based. We are increasingly outsourcing production of physical good to outside markets. 'There is a lot of physical stuff going on' isn't a useful assessment. Of course there is a lot of physical stuff going on, we are the largest economy in the world, there HAS to be.

The shiniest companies look great because they are able to automate and scale with incredible margins.

Why is the bay area so fully dependent on the proximity to rich people?

>The wealthy create wealth by investment, and there is a massive amount of investment going on in the past few years, yielding unheard of returns.

Who is doing the work? Are these rich people working 1 billion hour work days?

But something is happening, the SP500 is increasing (which in USD would be a meaningless statement), but it is also increasing in all (didnt checkk all) other currencies in the world, isnt it?

Because USD is a bubble, other countries wants to keep the USD high since they have lots of USD reserves, meaning that when USA prints money it doesn't weaken the USD. Until the other countries decides to bite the bullet and people stop using the USD as a global reserve currency.

USD a bubble is a huge stretch - you discount all your other comments with a comment as far reaching as this. If you are trying to insinuate that the USD has a higher value than its intrinsic value due to required demand as a result of a being a reserve currency than maybe you have something. That is nothing to do with being a bubble.

The USD is a reserve currency which has many profound effects associated with that it is not a "bubble" asset class at this point.

When the USD expands its currency base it actually does reduce the the USD valuation relative to other countries.

> The USD is a reserve currency which has many profound effects associated with that it is not a "bubble" asset class at this point.

That is the definition of a bubble. If people buy Tesla because they think others want to buy Tesla stocks rather than thinking the company will do well, then Tesla stocks are in a bubble. The same thing applies to USD. It being a reserve currency means it can keep its value without having assets backing up that value, that is how we define a bubble. Of course bubbles can last a long while, which is probably what you mean, but it is still a bubble and it will pop at some point.

Another reserve currency right now are bitcoins. Bitcoins being used as a reserve currency means people buy it to keep the value high, so that their savings doesn't go to waste. I'd still argue that bitcoins are a bubble, like the USD.

Absolutely and literally not a bubble - your definition is in fact, not a bubble: "It being a reserve currency means it can keep its value without having assets backing up that value, that is how we define a bubble".

FYI: Money has three functions: a store of value, medium of exchange and a unit of account. Fiat currency does not have assets backing it up for that you would need the gold standard that we abandoned in in the 70s.

A bubble: "Bubble, in an economic context, generally refers to a situation where the price for something—an individual stock, a financial asset, or even an entire sector, market, or asset class—exceeds its fundamental value by a large margin."

And to your bitcoin comment: not even the slightest - bitcoin is not money it does not have the same functions it is a speculative asset investment (taxed on your gains, which money doesn't have).

>Because USD is a bubble

lol no. Do you have any proof of this that's not a crypto blog?

>stop using USD as a global reserve currency

Not gonna happen.

I view USD as the same kind of bubble as crypto assets. People buy both as a reserve currency.

> Not gonna happen.

Why are you so sure of that? Things can happen extremely quickly once it starts, it is when people believe it wont happen that the crash is the worst.

>Why are you so sure of that?

Because I understand basic macroeconomics and how prolific and dependent global finance is on the USD.

So why is gold about the same price as it was in 2011?

The Feds balance sheet has doubled since the start of the pandemic https://fred.stlouisfed.org/series/WALCL

These conversations are always pointless though. The economy is so high dimensional that any conversation about it is going to be missing most of what is actually happening.

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