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Comment by trention | Hacker News Reader

If you think you will be able to tell by looking at a period of 6 months whether a contraction (that hasn't actually even started yet in terms of total employment) is just a regular recession or the apocalypse you prophesize, I have a brooklyn bridge to sell you.

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"Apocalypse" is needlessly dramatic language.

I think in 6 months we'll:

- Unquestionably be in a recession

- Have interest rates higher than they are today (i.e. cheap money does not return)

- Major layoffs across the board at tech companies

- It will be much harder to find a tech job after layoffs

- Inflation still not tamed despite interest rate hikes and declining employment

- Clear sentiment that this is worse that the dotcom bust

I'm not sure how anyone working in tech, looking at the data behind the scenes, seeing where all the math doesn't quite add up, can possibly think what we're heading for will be a "regular recession". "apocalypse" is a bit hyperbolic, but this is going to be bad and I will be delighted to realize that I'm foolishly wrong on this one.

For the record, this is what I thought would happen during covid, but never imagine the insane[0] amount of money the FED would pump into the market. However we've exhausted that option, and I don't see how we're going to print money out of this one.

0. https://fred.stlouisfed.org/series/M1SL

I agree. Its not going to be good. My main concern is staying employed for that whole period of time. As long as I can stay employed, I think I can come out on top, since people currently employed get hired easier than people who get laid off, ironically. I don't expect the economy to ever "return to normalcy." Our economy is currently diabetic and we are pumping it full of insulin to offset the years of sugar we pumped into it last decade. It may even out after a REALLY long time...everything does eventually. But until then things are going to be rocky.

And I think your hunch is about as correct as your rationale for posting the M1 graphic without reading the note below it or noticing that it jumped 4-fold in a single month.

I'm well aware of both the note and the jump. If you think that increase is merely an artifact of a change in methodology then you should spend a bit more time researching on what you're looking at. The jump is quite real.

There's actually a good stack exchange post covering this: https://economics.stackexchange.com/questions/45886/has-ther...

As well as the FRED itself release and explanation: https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec...

> In late February and early March of 2020, the Fed cut its policy interest rate dramatically to help ease credit conditions during the COVID-19 crisis. The resulting acceleration in the supply of M1 can be understood largely as banks accommodating an increase in people’s demand for money.

This leads back to your original "money will be cheap again" point. It won't, since we're partially living in the consequences of doing this during covid. Inflation is being driven by many factors, but the FED will continue to increase interest rates to try to fight it.

Again I'll be more than happy to see you proven right but so far your responses haven't given me much confidence.

If you are well-aware, why didn't you use a more adequate money supply measure like M2 or M3? Is it maybe because the growth there was nothing out of the ordinary looking at the past 10 years?

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