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Prompted by @lynaldencontact's post on NOSTR. For people in the US, what has been your experience with tariffs during the last three months. Do you feel like things have gotten more expensive, i.e. it has been passed on to consumers? Or hard to say at this point? Any other noteworthy tariff related personal anecdotes to share?
Also, anyone know which numbers she is referring to?
Unrelated, can we have an SN bot curating Lyn's most interesting takes on NOSTR?~~ I only saw this as i went back to NOSTR after a few months of forgetting about it.
As with inflation, it can take from 6 months up to a year for the effects to be felt generally. People who receive the imported products first have been impacted instantly, both by price increments and perhaps more importantly by incertitude, which immediately got entrepreneurial sidequests shut down, which translates into less job opportunities and so on. All of those effects will take up to a year to be felt by the general public, if not removed previously. However, the trauma of the whimsical back-and-forth from Trump is causing severe damage indirectly due to increasing incertitude on what he will be doing next. Even a bad plan is not that bad if it's at least consistent, that is, it's much less damaging to persist with tariffs increments steadily and predictably with time, instead of going on-and-off about it repeatedly and totally at random, especially if you have a hundreds years long hard earned reputation of being an overall stable market.
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Great answer
It’s hard to parse the inflation that was already baked in from that caused by high tariff rates from that caused by tariff rate uncertainty.
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Yeah, it's for sure not an exact science. Either party can parse the numbers any way they want. I wonder sometimes, as an economist, how one makes sure not to let personal ideology cloud one's objective interpretation of the numbers? Must be a constant internal battle for truth.
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Economy is societal thermodynamics. As such, one of the fundamental principles is that of net preservation. You can always make very precise judgements on the net output long-term by simply looking at the input, ignoring whatever twirls in the middle. For example, in the case of inflation, a duplication of the monetary base will cause all prices on average to increase by 100%. In the meantime until that final and unavoidable state settles, prices will vary seemingly at random here and there, some might not change and some may increase by more than 100%, so if you make yourself the question "which price increment is driving inflation" you will be unable to parse the information correctly and conclude that "inflation is not an exact science", when in reality it's a perfectly deterministic outcome.
In the same way, in the case Undisciplined points out, how each cause will determine a final inflationary value once all settles (that is, if tariffs and money emission do not changes) has a perfectly defined percentage of final responsibility. An overall 50% of tariffs if imports account for 50% of the economy will have a net effect of 25% of inflation. A 100% monetary emission that's spent 50% on the country will cause 50% inflation. The net effect will be a 1.5*1.25= 1.88 => 88% total inflation. And so on and so forth.
Using this deterministic nature of monetary policies is that Milei was able to prevent an economic collapse, by simply executing a predefined plan.
If you want to perfectly understand monetary policies (and why they're something to get rid off for good), look for Milton Friedman speeches. He's the absolute master on the matter.
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Aren't you missing the role of tax incidence when talking about the pass-through from tariffs. It seems like you're assuming the exporting nation bears none of the tariff cost.
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I do not assume that, I know that's how it's first hand, from direct experience in Argentina. A company must keep margins to stay solvent so all tax increments are always passed towards the customer. Tariffs are simply a tax imposed to US citizens when buying foreign products. A company can withstand temporal costs variations, but an official 100% tariffs will only mean that you get to paid double for the same product. You will see it in action by yourself.
@remindme in 3 hours
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That’s a deep question and probably warrants a lengthy discussion.
In short, I think it’s helpful to state your expectations ahead of time. That way you’re less likely to fit the data to your beliefs post hoc.
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57 sats \ 1 reply \ @gmd 17h
💯 I don't know how anyone can plan their business around this craziness...
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Exactly. No one can, so the only victims are US workers, for you can't take the compromise of a new salary contract if you can't tell if the good you're importing to get that new line going will become forbidden or unaffordable tomorrow beyond appeal. Thousands of high-end job positions where instantly lost due to this, and the effect is already affecting the general workforce as the recent statistics scandal very predictably revealed.
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Tariffs are implicit admission by USA it cannot compete on the international markets and is facing imminent insolvency. It is the most brutish crude and desperate policy from the former 'leader of the free world and capitalism. It is admission that China has won the (free) trade war and USA cannot compete. China has made a complete fucking fool of Trump by blocking exports of rare earths and forcing Trump to grovel and rescind his bullying stance. China now holds the cards and USA looks vulnerable. Chija is now openly taking a more assertive stance- because they can and US hegemony is on the backfoot. The rest of the world is watching.
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The USA is more than able to compete against China in any market of its interest. That's not the problem, the problem is much, much darker: tariffs are the confession from the US government that it's unwilling to revert the socialist burden it has drowned its own industry into, in order to maintain the privileged status of the governmental caste. Ironically, Chinese efficiency is putting the US caste against the ropes, pressing for it to become a freer country. Once that happens, China itself is next. Accelerationism is real.
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USA cannot compete in virtually all manufactured goods. The tariffs are admission of that!
China dominates global commodity markets- paying the best price for many commodities which it then either consumes or uses to make manufactured goods. China builds infrastructure globally and USA cannot compete. The oilfeilds of Iraq and elsewhere are increasingly developed by Chinese engineers and companies.
Yes USA ditched its productive capacity and infrastructure because it became drunk on the extraordinary privilege of being the issuer of the global reserve currency and believing it was the best and always would be- today its military may still be stringer than any other nation but China is catching up and is using Russia as a proxy to test and challenge Europe and US hegemony.
USA cannot source the rare earths it needs to produce military equipment - China has a stranglehold on the refining of these multiple strategic minerals and Trumps tariffs bullying of China has been exposed as foolish and ineffective with Chinas response of curtailing supply of rare earths to US military associates.
China has cloned nearly all of the wests manufacturing advantages - China now produces EVs, solar panels, robots, drones, nanotech, biotech, infrastructure and other strategic goods at lower cost than anyone else can.
Their mixed economy delivers superior efficiency to the wests crony capitalism which has increasingly become a financialised cesspit of non productive speculation because it cannot produce goods and services anymore at a competitive price.
Trump is justifiably afraid that Chinas domination of global trade will result in decline of the USD/SWIFT hegemony upon which US empire viability is not dependent.
The ultimate outcome is hard to predict but nobody can credibly say USA will remain the dominant global hegemony.The next ten years will be 'interesting'. USA Treasury trying to sell $100 Billion short dated (one month) next week shows how precarious the US empires liquidity and overall viability is.
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USA cannot compete in virtually all manufactured goods. The tariffs are admission of that!
This is fundamentally wrong, check the basic logic of the statement and you will easily realize it reduces itself to absurdity: if tariffs are an admission of US inability to compete, then why high-tech products that are not manufactured en masse in the US, like semiconductors and chemicals, have no tariffs due to, indeed, not being manufactured in the USA en masse? Isn't in that case the lack of tarifs an admission of inability to compete? You do realize it doesn't work at all like that? Tariffs are, again, not a shield against the outside world but a contention of inside exploitation schemes: the corrupt US socialist government will not dare to bring down taxes to make their industry competitive again, they will answer by increasing them under the disguise of "protectionism", through tariffs.
China dominates increasingly (...)
"increasingly" do not equates "majority", and making advancements do not means "gaining the lead". Further, advancing on some areas do not equates advancing on all areas.
Yes USA ditched its productive capacity and infrastructure because it became drunk on the extraordinary privilege of being the issuer of the global reserve currency
I fully agree on that part.
China is catching up and is using Russia as a proxy to test and challenge Europe and US hegemony.
If you can not see that Europe and the US are doing exactly the same with Ukraine you're missing half the story and will necessarily arrive to the wrong conclusions.
USA cannot source the rare earths it needs to produce military equipment
It absolutely does and will scale up production soon. You're relying on outright false information here and thus, again, unavoidably arriving to wrong conclusions.
China has cloned nearly all of the wests manufacturing advantages - China now produces EVs, solar panels, robots, drones, nanotech, biotech, infrastructure and other strategic goods at lower cost than anyone else can.
And that's a remarkable feat we all welcome gladly for it makes our lives better. Still, the observation on the first item holds.
Their mixed economy delivers superior efficiency to the wests crony capitalism which has increasingly become a financialised cesspit of non productive speculation because it cannot produce goods and services anymore at a competitive price.
I fully agree on that except that it's important to remark that what works on China's "mixed" economy is precisely one part of that mix, free market capitalism, while the other part has managed not to damage the other one that much, yet still does. It's a net positive, not a no-negatives.
Trump is justifiably afraid that Chinas domination of global trade will result in decline of the USD/SWIFT hegemony upon which US empire viability is not dependent.
I agree, and his measures only help to exacerbate that situation.
The ultimate outcome is hard to predict but nobody can credibly say USA will remain the dominant global hegemony.The next ten years will be 'interesting'.
All following years will be interesting and all major powers will unavoidably have their ups and downs. As long as the fight for supremacy remains on the realm of economic competition, we all win. I give you even more: China is leading by the example right now on international economic policy, and Trump is making a total clown show. I side with China's approach, and condemn Trump's brute, ill informed and incompetent measures.
USA Treasury trying to sell $100 Billion short dated (one month) next week shows how precarious the US empires liquidity and overall viability is.
Same old news, don't rely on those single events. What should we think about Evergrande's disaster on China? They all always come out of those situations, they both are too big to be bothered (still).
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1-'if tariffs are an admission of US inability to compete, then why high-tech products that are not manufactured en masse in the US, like semiconductors and chemicals, have no tariffs due to, indeed, not being manufactured in the USA en masse?' Because some exempted chemicals and semiconducters (and Canadian fossil fuels) the USA cannot produce at all or cannot produce competitively but are needed by US manufacturers and or consumers. That does not refute the argument that tariffs seek to protect US manufacturers and producers from more efficient offshore producers.
2- ' China dominates increasingly (...) "increasingly" do not equates "majority", and making advancements do not means "gaining the lead". Further, advancing on some areas do not equates advancing on all areas.' This is cherrypicking semantics and ultimately evasive nonsense- China Does Already lead and significantly on robotics, EVs, Lithium batteries, Rare earths, Drones, PVs, LEDs, and infrastructure construction.
3- 'USA cannot source the rare earths it needs to produce military equipment
It absolutely does and will scale up production soon. You're relying on outright false information here and thus, again, unavoidably arriving to wrong conclusions.'
How long does it take to get up and running US or US allies based rare earths refining of all the rare earths that are absolutely essential to many military (and high tech civilian) applications? Ten years maybe at best, but even then all agree it will come at a massive cost- the US is simply incapable of doing that complex refining in a cost competitive way. It will/would take huge subsidies which free market end users cannot logically pay - only a determined government might. Japan failed to when facing exactly the same problem many years ago. https://www.wsj.com/world/asia/china-strong-armed-japan-over-rare-earths-its-a-lesson-for-the-u-s-230f8379?
4- 'it's important to remark that what works on China's "mixed" economy is precisely one part of that mix, free market capitalism, while the other part has managed not to damage the other one that much, yet still does. It's a net positive, not a no-negatives.'
This is where your ideology of unalloyed belief/faith in free markets is evident. Please see the example above of rare earths and their strategic importance and Chinas state lead and deliberate investment in achieving dominance and control over the global supply. China is led by a poliburo of mostly engineers. They know that of they do not deliver real gains for most Chinese they will lose their 'Mandate of Heaven'. They would be removed, and probably quite brutally. They face incentives and consequences the corporate sponsored politicians who front wealthy US corporate capital do not. China has quite deliberately and methodically directed capital primarily toward productive infrastructure and manufacturing where it enjoys significant advantages. It has built a supply chain and raw materials and infrastructure that build on the productive competitiveness of its manufacturing. It has actively and aggressively directed capital toward investment in technology and capacity that builds long term competitive advantage. They started their energy efficiency drive in the early 2000s to get better use of energy- an area where China is still highly dependent upon imported fossil fuels and its own coal reserves. Under the system individual businesses can and do enjoy astounding success- as long as you remain within the bounds of the Party Strategy. In contrast in the US Capital (banks and corporate lobbyists) own most of the politicians and have done for decades. There is a lot of anti-competitive rentseeking cronyism because the US electoral patronage system allows and encourages it. Chinas poliburo strategy of becoming the most efficient productive economy on the planet has succeeded because they were not bound to the dictates of the IMF and World Bank agendas of perpetuating western imperialism and its hegemony over resources and markets. They have beaten the wests crony capitalism with their deliberate mercantile mixed economy approach. Now they are forced to confront and contest the US legacy hegemony over international institutional structures and protocols. CIPS and mBridge to challenge SWIFT for example. The IMF post GFC invited China to join its board of reserve currency issuers because Chinas economy was by then already pivotal to the global banking system. With Hong Kongs return to Chinese sovereignty China can and must build its own financial infrastructure. It was via the cannon that Britain seized Hong Kong and via British banks in Hong Kong that China was made subject to British imperialism. That and the Opium Trade. Chinese have not forgotten the lesson of their 100 years of subsequent humiliation. Most in the west have.
Peter Hesslers excellent books on China though now a little dated, were also rather prescient and are still well worth a read, especially 'Country Driving' if you want an economic development perspective. Most in the west are woefully unaware of Chinas incredible history and current strategy and the connections between the two. Hessler sees it and describes it as a westerner living in China and does so brilliantly.
5- 'What should we think about Evergrande's disaster on China?' It is true that China is struggling to develop suitable markets for its newly and increasingly wealthy citizens to invest in - look at US and western history for many examples of how complex and fraught this process can be. Problems of success! So certainly China has relied overly upon real estate investment for citizens investment and that has to be addressed and broader more healthy investment options and markets need to be developed- and are being...but that is a challenge for sure. Regarding Evergrande specifically it was western funds that took perhaps the largest hit. https://fortune.com/2024/02/08/evergrande-liquidation-99-percent-haircut-hedge-funds/
I understand the huge resistance to accepting that US/western dominance is waning and may be on its last legs- it is a hugely confronting/frightening topic for those who do not understand the history of empires and the crucial role governments have always played in the wealth of nations. In the US the exceptional privilege of global reserve currency issuance and corporate patronage has corrupted the entire structure of the government and economy while China has purposely and determinedly positioned itself to respond to the reality of western imperialism and its late stage decadence. Those who will not acknowledge the degree to which US hegemony dominance is now being contested challenged cannot prepare for its consequences and even those who do, face a challenging and uncertain future.
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That does not refute the argument that tariffs seek to protect US manufacturers and producers from more efficient offshore producers.
It absolutely does, in the most extreme way possible for it's the limit case: tariffs are not being imposed in an almost non-existent internal industry. Should your tariff logic apply, importing said products should be directly forbidden, and it's not, so your logic is false.
This is cherrypicking semantics and ultimately evasive nonsense
It's not, and indeed your cherry picked examples of leading industries are proof of that. You named 7 examples out of the literally millions the economy is composed off, and left outside equally important industries like, to name the most obvious, space launchers.
How long does it take to get up and running US or US allies based rare earths refining of all the rare earths that are absolutely essential to many military (and high tech civilian) applications? Ten years maybe at best, but even then all agree it will come at a massive cost- the US is simply incapable of doing that complex refining in a cost competitive way. It will/would take huge subsidies which free market end users cannot logically pay - only a determined government might.
God forbid the US tries to "invest" in mining and processing. Any state-dirven policy can only end in massive catastrophe. If the US is to do this right, it will simply reduce taxes and allow for free export and imports, and the industry will thrive quickly. The tech is already in place and operative, scaling might take time but with the help of Chinese imports it will be steadily sustainable. At that scale, 10 years are a blink of an eye, and if the US government makes sure entrepreneurship can develop freely and at low taxes, it will develop as fast.
China is led by a poliburo of mostly engineers.
Which is why China is still decades away from it's true potential. The day said politburo stops intervening, China will thrive in ways unprecedented in history.
They face incentives and consequences the corporate sponsored politicians who front wealthy US corporate capital do not.
The day the US gets rid of its crony capitalism and embraces the full free market, it will get back to its old glory days, indeed.
Chinas poliburo strategy of becoming the most efficient productive economy on the planet has succeeded because
it relies on slave labor.
It is true that China is struggling to develop suitable markets for its newly and increasingly wealthy citizens to invest in
Which is why said markets must never be developed by state intervention, for it can only lead to a predictable disaster like Evergrande which is, by the way, a blatant example of crony capitalism at the extreme in China.
I understand the huge resistance to accepting that US/western dominance is waning and may be on its last legs- it is a hugely confronting/frightening topic for those who do not understand the history of empires and the crucial role governments have always played in the wealth of nations.
I have no resistance either way, I'm ready to embrace China whenever it develops freely, for it will only be good for all. There is not and has never been anything remotely close to a "crucial role" of governments on economy other than causing damage to it, and China is an excellent example of a great population permanently hindered by interventionism. If today's China is what's left, imagine what it would be if the state would once and for all take off their boots from China's head! It would be the most epic revival in history. Just a glimpse of that is exactly what happened on Guangdong, which thrived exponentially only by being freed from the boot of the politburo.
Those who will not acknowledge the degree to which US hegemony dominance is now being contested
There hasn't been a single time since its inception in which the US dominance wasn't contested, and if everything goes well, this tendency will remain and hopefully equilibrate, for an equilibrium would mean that another power is at its level of producing goods and leading commerce, which is a good thing for all involved. Thinking in terms of "winners and losers" is a classical socialist fixed-pie fallacy. In reality, everyone wins, which is what's happening right now, in real time, right in front of you, otherwise China wouldn't sell and the US wouldn't buy, and vice versa. The only thing hindering further prosperity is the nefarious interventionism from both governments.
I've read both your answers with great interest. Although you guys have quite opposing viewpoints, you both sound quite convincing to me. Probably because I have no background in economics, I can't make up my mind who is right. Probably adding to that, ideologically, I am somewhere else on the spectrum, so it's even harder to see clearly.
I could ask for numbers to back up your claims, but it's probably easy to find numbers to defend either one of your viewpoints. So I guess I guess I'll just have to see what the future holds~~
Kinda like when I read Arthur Hayes. It's entertaining, but I have no way to assess if his doomporn is rooted in reality or not.
EDIT: Good to see you again on SN, @didiplaywell, I think it has been a while since I've read you here.
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Solomon raises some good points but @didiplaywell is more persuasive and coherent
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Always here to set things straight Sr
You can always find the truth by reductio ad absurdum. See my answer to Salomonsatoshi, to this comment you answered.
Glad that my contributions are of your interest :)
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I wonder which one it was? 7 figure subscribers is a lot. Was it Charlie Kirk?
My opinion is that the impacts of tariffs will be felt with a long lag, so there hasn't been enough time yet to really assess the full effects.
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Was it Charlie Kirk?
Not sure if he mentioned attending the BTC conference...
impacts of tariffs will be felt with a long lag
Yeah, making it even harder to disentangle it from other factors affecting the economy.
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Unrelated, can we have an SN bot curating Lyn's most interesting takes on NOSTR? I only saw this as i went back to NOSTR after a few months of forgetting about it.
The problem I have with nostr feed UX is that my feeds get shitty quickly, and I haven't found a great UI for "lists" yet, nor do I have time to code it.
I do see a quick solution to just integrate with nostr-to-rss, eg through (my own instance of) https://nostr-to-rss.deno.dev/feed?users=lyn@primal.net&replies=false and then let existing feed reading tools that have superior "inbox" features deal with it? Best-of-breed solution...
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When I relogged into Nostr yesterday, I think I stumbled on a tool that would let me curate a list of people to follow centered around a theme. Don't remember what it was.
The problem is that many same people end up in different lists. It's the same pool of btc/freedom maximalists mixed with some opinionated people about seed oil and the carnivore diet.
Still, it was useful, as before that I think I was only following 2 or 3 people.
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I think I stumbled on a tool that would let me curate a list of people
I've seen it in coracle but I stopped using that app because the UX was stressing me out. I'm not sure if amethyst supports lists - haven't seen it in-app yet. I've also seen some mention of flotilla.social but that's from what I can tell more client-server tech because it requires you to run something relay-side - sounds cool but yeah - lotta work.
Maybe I should just code me a nostr client with the features I want/need and not rely on other people's work...
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