Economics Explained's Hyperinflation Nonsense
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- Опубликовано: 2 июн 2024
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As an economist who studied inflation and monetary policy during his PhD, I was rather confused about one of the latest Economics Explained (EE) videos which makes wild claims and introduces many (seemingly) new theories. So, in this video, I'm checking if EE's claims are at least somewhat grounded in economic theory and not directly contradicted by data.
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△ Link to EE's video: • Hyperinflation is Alre...
△ Check out my economic country studies here: • Country Economics
5 BOOKS THAT INSPIRED THIS CHANNEL
The Narrow Corridor: States, Societies, and the Fate of Liberty: amzn.to/3gr6pSV
Money Changes Everything: How Finance Made Civilization Possible: amzn.to/3mt3xbY
Adaptive Markets: Financial Evolution at the Speed of Thought: amzn.to/3sCkS3a
House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again: amzn.to/3gqXNeZ
The Third Pillar: How Markets and the State Leave the Community Behind: amzn.to/382Agwo
PAPERS ON INVESTMENT UNDER INFLATION
papers.ssrn.com/sol3/papers.c...
papers.ssrn.com/sol3/papers.c...
SOURCES:
I've linked my sources in the blog that goes along with this video. Most links are in the text. But, I added some extra literature and data sources to the end of the blog.
www.moneymacro.rocks/2021-08-...
Timestamps:
0:00 - introduction
1:57 - is the US like Weimar 1?
3:03 - sponsor
4:06 - is the US like Weimar 2?
13:07 - when is hyperinflation unstoppable?
18:50 - is the US special?
20:27 - how to protect yourself
Attribution:
- Check marks by Alvaro_cabrera / Freepik
- Baker & bread by macrovector / Freepik
- young woman by pch.vector / Freepik
- up arrow Designed by Freepik
Narrated and produced by Dr. Joeri Schasfoort (University of Cape Town & University of Groningen)
/ joerischasfoort
/ joeri-schasfoort
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I’ve enjoyed EE for awhile but your critiques are excellent and convincing. I’d really like him to either respond or own his mistakes. There’s nothing wrong with being mistaken but there is something wrong with pretending that criticism doesn’t exist and hoping it goes away.
At the least he does an annual video on all mistakes from the last year. He’s noted some doozies in the past. The M1 graphed been noted everywhere so I doubt he’s missed that error at this point. I doubt he’ll respond to everything but some of it will be there
EE told me that he appreciates the professional criticism. Which I have to say is very commendable. We might duke it out / talk about it in one of his future live streams.
@@MoneyMacro Pin that to the first comment. Why is it down here to begin with?
It is there. Sry.
@@villemkukk5637 I did both
"If you laid all the world's economists end to end, you still wouldn't reach a conclusion."
You'd have the worlds longest argument by distance, though.
Has this channel ever mentioned what economic school it follows? i see macroeconmics being mentioned so i am guessing neo keynesian maybe.
@@gabbar51ngh Good question
@@gabbar51ngh I'm studying economics but I will avoid myself from following any kind economic school of thought.
I normally dislike critical response videos. They can be a lazy way to piggyback on someone else's hard earned success.
But when it's a subject matter expert responding with deep analysis and real data, that's a different story. Well done.
Thanks. Yeah I can understand how it can come across as lazy. But, phew this one took me at least as long as my normal country analysis videos.
like critical drinker?
My husband (he's a programmer) introduced me to EE. I've my masters in Accountancy. I've always loved Economics but it's never been one of my core subjects. When I saw EE's videos I just kept saying "no, that's not true" but could never really explain why. Thank you for explaining it so well and taking into account the other economic factors.
P.S. My husband introduced me to your channel as well!
sadly, programmers are often the most naive of the lot. I have two degrees in computer science and economy, and am an engineer in the software industry. Everyday, I am hit with the fact that the neivity here is strong, willful blindness is everywhere, and the illusion that if one can write a program one is up there in the intellectual scale is hardly bearable.
@@qweqwe9678 they are just nerds
Sister u have no idea how fed money printing affects Indian and world market negatively...just because u r in usa don't forget abt other countries...amd whats the inflation now?
@@qweqwe9678 As Larry Wall would say "the three great virtues of a programmer: laziness, impatience, and hubris".
@@qweqwe9678 ayyy we're CS + econ double major buddies
This is an excellent and fair response to what was, let's be honest, a very silly video
Thanks! I think it's high time that we critically discuss some of the more serious inflation theories / narratives doing the rounds.
@@MoneyMacro what an excellent idea
Agree, economics explained used to be better, but over time became more sensationalist....or maybe I became more critical....
@@timmysworld3859 probably a little of both
nothing as silly as the videos you post every day
Fantastic work. As a long time EE viewer, I've been increasingly skeptical of his analyses over the last year or two. I'm deeply grateful to see well-researched counter-arguments like this.
yeah I don't think EE has a credible background or content at all, it's ridiculous the stuff he pumps out.
Yeah it's been a slow roll into some wonky guesswork
I've only seen a small number of their videos, but I dropped them completely after seeing a couple of videos last year that I could counter argue off the top of my head with basic logic. I think they went off the deep end for the sake of views.
The EE video claiming that the housing crisis isn’t necessarily a bad thing was a huge red flag and I was surprised that there were no videos directly pushing back.
@@Asukol It's beyond clear at this point he's a libertarian ideologue with a foot in the zerohedge doomer camp.
This aged exceptionally well (unlike EE claims).
People have been predicting hyperinflation since Obama got in.
Still waiting for it to happen.
It's important to know that hyper inflation only has happened about a dozen times in the past 250 years. Also every time it happened it was due to some extraordinary combination of circumstances including social collapse, massive strikes, foreign intervention and more.
You don't get hyperinflation by printing a few too many bills.
MM + EE = MEME
Id love to see a collab video between the two.
When your working alone it is easy to get blindsided and get things wrong or misunderstood.
This is why response and constructive critique videos like these are good.
And having a discussion between conflicting ideas usually leads to better understanding of it all.
I completely agree with this. I appreciate seeing both sides! Unlike some on this channel - I dont think him getting things incorrect instantly makes him a liberal or libertarian shill.
Yeah, this video missed some pretty obvious things. The line about comparing the USD to a basket of foreign currencies would have made me facepalm if I wasn't sweating at the gym.
I don't know about that. EE at this point seems to be synonymous with lazy research and clickbait. Not sure if MM & EE get along in any way.
@@gubaification I too have noticed that EE has become much less useful, which is why I no longer watch.
@@doc7000 worse than useless. He actively mixes lies with true statements.
Thank you. What this channel does is really important.
It's very easy for those not within the academic economics space to easily accept or not know whats potentially wrong with arguments made in 'populist' videos around macroeconomics and public policy(sometimes tainted with political beliefs); especially given how popular they are to the general youtube audience.
didn't read ur comment, awesome nickname tho
@Disney Take Rhino Dix simple ideas for simple minds
@Disney Take Rhino Dix do people like this realize that reality proves then wrong? Unemployment is low, meaning that you're wrong. Period, end of story...
So true, I went to school for finance so I can just follow this stuff liitle bit with out too much though, but I think about friends and family members who listen to popular interpretations of economic principles and I just get so sad.
I mean for the most part it’s a waste of time to talk to the average person about these things. But I stay positive cause I have my own business and I’m always trying to mitigate a potential-fall out through continuously self study.
The idea that there's some sort of prepolitical way to view this stuff strikes me as incredibly wrong headed on top of being pointlessly positivistic. The reality is at the end of the day that our ideas about society are profoundly socially informed and ignoring that is exactly how you get the sorts of problems you're complaining about here. An active and meaningful engagement with political-economy is necessary if we want to address these sorts of things well, because ultimately it's happening regardless, we just get to choose to be aware of it or not.
I’m not an economist, but I do follow economic news. It’s difficult for me to contradict EE who *is* an economist - but several times when I would watch his videos, especially his country videos, a lot of things just seemed wrong..
So glad to have found your channel!
@jshowa o economist isn't a controlled term like dentist or doctor. Its just a word for someone who works in the field.
@jshowa o its just a convention. You might not be taken seriously by everyone by simply declaring it but clearly some people do take EE at face value.
Whereas if you call yourself a dentist you're likely to face legal consequences.
EE is not an economist lmao
@jshowa o absolutely true.
@@SouL1Jacker I believe he actually does have economy credentials. Doesn't make him infallible or unquestionable tho. What he presented there can be classified as a hypothesis, he has some arguments, some good, some less so and it is nice somebody critiqued them. When somebody predicts a collapse of any sort people should be highly critical.
These response videos are so important for so many reasons. It's much healthier to get different perspectives rather than taking one creator's views for granted.
I'm a viewer from Indonesia, also currently learning economics in one of the local universities. Sometimes I find the economics curriculum to be very hard to follow and I resort to youtubers like you and EE to make me understand about economics. I kinda feel dissapointed that EE wasn't as correct as you have criticized, but it's things like this that make the economy so interesting to learn! Thank you for your hardwork, and the way you humbly respond to other viewers comments even engaging with them is so down to earth. One of my favorite economics youtubers!
Hello fellow Indonesian
Yeah the Red Flag about EE is the lack of sources or articles
As an Indonesian who studies public administration, I actually use the EE video as an additional reference in formulating public policy, but this MM video provides new insight into how we need to see gaps in data that has been presented by other parties. This is very applicable when you read government policies. just as an example, Sri Mulyani said that Indonesia grew during the pandemic, which ordinary people would simply believe. but if we examine, the statement is true, if we compare quarterly growth in 2019 Q1 to 2020 Q1, not in 2019 Q3 to 2020 Q3 or the whole of 2019 to 2020.
EE is very popular in Indonesia, and honestly not surprising because of huge numbers of libertarian/neolib millenials.
For shame, really.
EE is more of a place to get popular myths about country economies.
Thank you for doing this response. I was hoping that you would. I like EE's channel but his hyper-inflation series has struck me as overwrought and odd. I am not a chauvinistic American but the comparisons to Zimbabwe and Weimar Germany were alien to my day-to-day experience. For instance, he made a big deal of soaring lumber prices in the U.S. As I write this, lumber prices are down to 2018 levels, hardly the turn of events that has me rushing out to turn my retirement savings to Gold and Dogecoin.
"alien to my day to day experience" or obvious nonsense.
I can see that from Scotland
A different answer to the lumbar price was a microeconomic response: individuals played the waiting game in the real estate market
@@julianshepherd2038 I was being polite.
@@ErikPT Exactly! Paul Krugman has detailed other microeconomic responses in the Times.
Given that he was wrong on hyperinflation, and disastrously wrong on wealth inequality, I really have a hard time believing that he's a trustworthy source on anything. He's excellent at turning a few small kernels of truth into a nice sounding narrative, regardless of whether it is true or not. And I find that to a scary thing.
I really hope he responds. I've kind of felt that since 2021, his channel has fallen off a bit. The arguments seem to make less sense, the videos come out less regularly and the subject matter is l as interesting. Healthy competition may bring EE back haha
That is the plan :).
That happens to every channel past a certain point of subscribers.
EE told me that he appreciates the professional criticism. Which I have to say is very commendable. We might duke it out / talk about it in one of his future live streams.
Maybe he reached the limits of his knowledge and is looking to expand now?
@@ES-sb3ei He's entretaining for people that know little about finances. I cerntainly fell for it. Glad "Money & Marco" exists
Shorting currencies was a standard practice in Yugoslavia. Before the war hyperinflation made the Dinar worthless so people turned to the DM, but before the hyperinflation really hit everyone payed off their mortgage with one or two monthly wages. So everyone who had friends or family in Germany bought a lot of real estate and we ended up with a lot of house owners. This could never happen again, but it made a lot of people seriously wealthy.
YT decided I needed to start watching EE, and after seeing his arguments about why we didn't want to fix the rising cost of housing, I started looking for content like this. Thank you for posting this. Liked and subscribed.
I'm grateful that channels like yours exists. EE has every right to offer their opinion, but to boldly brand themselves as being *the* Economics Explained, as if to suggest they are explaining actual economics as opposed to offering unfounded commentary -- is arguably dishonest and misleads far too many students who can't tell apart propaganda from fact. I hope you continue to debunk videos like this.
EE has become more like entertainment than actual news much like Fox News in America. And the same people enjoy both
That 10 second resume of WWII from my nice Berlin flat was pretty epic
Very well argumented and well put. "Always look at the assumptions made" is an excellent rule of thumb when evaluating economic theory.
I'm glad YT suggested your video (you have awesome "guy doing research" skills !). I usually like EE videos but when he discusses a subject I actually know something about, it feels really oversimplified and sometimes wrong.
I would love to see if EE has something to add to your video.
EE has become more like entertainment than actual news much like Fox News in America. More opinion than fact
EE is becoming more and more unhinged every video. I can’t help but think he’s got something else going on.
@TacticalMoonstone this will for sure backfire in the citizen trust of their own government.
Love the level of digging you do to test the assumptions of each argument. Really enjoyed this video.
Thank you for this. I'm glad there is finally some debating going on in the Econ RUclips community, hopefully EE can make a response to this video! Your channel has grown so much since I last checked.
22:45 I had a suspicion Weimar mortgages were revalued, but the montage that follows was exactly what I was thinking while watching the original EE video.
Awesome that EE reached out! Hope to see that line stream sometime soon! Stellar analysis!
I'm not really an economist but on a hobby on getting to know about economics, been a huge fan of EE and quite skeptical on this video, but presented with data and another perspective of things its hard for me to not rethink and evaluate EE's perspective. More power already subscribed and still hoping for a comeback from EE his making Economics easy for pleabs like me.
Thank you for this video
While I like EE, I do think he's a bit pop theory-ish - your insightful breakdowns are definitely welcomed!
I don't understand how people can enjoy being lied to or if exposed to an obviously bad source, keep going back lol.
@@lifeunderthestarstv yeah exactly. If someone’s been proven to not know that they’re talking about on multiple occasions and haven’t corrected themselves how can you consider them good faith actors?
@@hithere5553 this 100%. I understand in the last 5 years people have become very politically correct online and people getting called out on facts not drama rarely happens. But having watched a lot of EE, it becomes very obvious that he isn't very well educated in what he states, doesn't do much research as he makes basic errors, and clearly has political bias and leaning. As most armchair economists are the guy clearly loves the right wing, venture capitalist stuff and hates any socialist stuff. Which is hilarious given all the socialist countries are the richest, including the US lol.
@@cn2673 correct me if I'm wrong. Does the US have unemployment benefits? Also known as social welfare? A socialist ideal. Does it have government assisted housing? A socialist ideal. Does it bail out its companies even though its in a 'free market'? A socialist ideal. Every top economy is a mixed economy. As we all realised roughly around the 60s that corporate capitalism sucks ass. The rich dominate everyone. Socialism seeks to redistribute. So please, try to argue how Netherlands, Belgium, France, Germany, portugal, etc etc aren't socialist while anyone that knows EU politics laughs at you for holding an idea of socialism from over 70 years ago lol.
@@lifeunderthestarstv you don’t hangout in tankie circles and it shows.
I've waited for this for too long! Thank you for this video!
I appreciate you scrutinizing other tubers. Very interesting, good work.
I'm so happy to have found another solid channel that is economics focused. I'm into my third year at University, and one of my majors is Business Economics.
The problem is, most of my economics classes are dryer than a Saltine in the Sahara. No joke, I've had more than one course start with a Calculous Pop Quiz on the first day of class. I appreciate that Calculous is an integral part of economics, but when every lecture and assignment is one equation after another, with no context or meaning, you lose me really fast.
That's why I'm glad for channels like this. They give me insights into different disciplines of economics, make it engaging, don't talk down to me, and give me all those sources to read afterwards. This is great.
I love this "peer review" videos, I also find things in EE's videos that I know that are wrong, but can't explain why. Thank you for the effort that you put to make it clear to everybody.
Great to have an informed moderating voice in this field on RUclips.
Another great video! I'm planning my move to the Netherlands in the next year and your channel is a great way for me to get used to a Dutch accent (haha). Dank je wel!
22:07 EE did specifically say 'fixed-rate mortgage' in his example, so the high inflation rate would not increase your mortgage.
The monthly installments could be paid by selling even the smallest possessions, since getting a few hundred marks would have been ridiculously easy.
My point there was not about it being a variable rate mortgage. In a high inflation environment interest rates are already very high. So, you will have high monthly payments. The follow up point was then that before hyperinflation sets in the economy typically tanks already. So, then you won't be able to sell your possessions for a lot. In summary, the strategy can work :) but..... you need to be able to hold out until hyperinflation sets in.
@@MoneyMacro I don't like to defend EE, but in his example, the mortgage started before inflation started to rise, in 1920. The idea being that the interest of the mortgage was fixed before interest rose (in 1923).
@@MoneyMacro Also, I don't really get why you wouldn't be able to sell any old book of yours for a lot of (worthless) marks to pay your mortgage installments. The fact that the economy tanks doesn't stop you from selling items. In fact, it makes it easier, as everyone and their mother wants to get rid of their money as soon as possible. Since the longer they hold onto their cash, the less it will be worth.
@@Ramschat please do defend him. It's part of the debate process.
To be honest, I had some difficulties with finding interest rate data for Weimar. How high was it in 1920. I did find data that Zimbabwe interest rates were already like 30% a couple of years before hyperinflation.
Lebanese rates were lower though... but there a problem is that many Lebanese loans were already in a foreign currency (defeating the point). And the Lebanese stats are pretty bad in general in the years before hyperinflation.
The point is if a country is truly close to hyperinflation... would banks be dumb enough to lend at low (fixed) rates a couple of years before hyperinflation?
I admit my answer is not as certain as I'd like it to be because I couldn't find good data on interest rates in pre-hyperinflation countries.
@@Ramschat the point is that the economy often tanks *before* hyperinflation ... e.g. check out asset market performance in Lebanon before hyperinflation.
This video poses and answers a lot of interesting questions with actual insights. Definitely watching more.
More of these videos PLEASE!!!! I can't get enough of them.
Haha very good. I will make response / fact-checking econ videos a part of the channel. I think it will be good for the RUclips econ community. But, I will focus on other channels for a bit first. I don't want to become the EE bashing channel.
This was a very well done video. So much better to see the simple explanation of a small change in the definitions of M1 and M2, causing the graph to spike so much. And for people who are thinking of buying gold and going to live in the mountains with a pack of dogs to protect your gold, well - you might be better off investing in the stock of a carefully chosen company that produces something people need every day. I really appreciate the work that went into this video, I am relatively new to the channel, but will definitely be coming back.
Just found your channel today, love the clear and academic response to EE.
Wow! Thanks a lot for this! I have to say: I'm loving your videos more and more.. I think your writing - and production value btw - is improving day by day! Well done, Joeri 👏👏
I always look forward to these corrections of EE...while I sit on my chair in Cape Town
I rarely feel it worthwhile to comment on videos, but thank you so much for this. People make assumptions about economics and, when faced with someone who claims to have data (regardless of if they do or not), people tend to grant them credibility. I used to watch Economics Explained, but after I started reading more about economics I realized something seemed wrong with a reasonable portion of what EE says (never mind the fact they too easily accept their own macro theory viewpoint as unquestionable fact, never considering their lens is only one among many). Yet whenever I would check the comments of an EE video, it sounded like I was the only one who even contemplated that something was off. Being no economic expert like yourself, I thought I was probably the uneducated idiot who misunderstood everything about economics. Thank you so much for making this video, I only wish half the people who watched the EE video will watch this and will be spurred to learn more about economics.
I am happy to hear that. I tried commenting on a couple of videos first. But, those were not easily found. That is why I turned to these two response videos instead.
This was great. I loved how you broke down the concepts and analyzed them individually in-depth...
Great video. The work you are doing is hugely valuable! Looking at what follows asset prices booms, it's deflation....and asset prices busts. A scary prospect....
This is awesome! Keep it up! Finally a good economist channel!
This was the video that first made me question EE... Still a big fan but it still didn't sit right. I was impressed by your response to the Dutch economic inequality & this was even better being a little more relevant to me. Greatly Appreciated!
The fact you backed your sources does it for me. You gained a subscriber!!
I enjoyed this video, great job! Also the 3 yellow binders are *AESTHETIC*
Ik was altijd wel een fan van EE, maar sinds je populaire video over de extreme ongelijkheid in de Nederlandse economie moet ik bekennen dat ik zijn kanaal toch als wat minder positief ben gaan beschouwen.
Goed werk in ieder geval!
I'm not sure if the conclusions at 11:28 are aging well. Productive capacity certainly seems to be trending downwards in China and Europe due to the energy crises there, and demand for goods has never been higher, so I don't think the money supply has really decreased. Combine that with lasting supply chain issues and bottlenecks at shipping hubs, effective supply of goods is much down. Some are calling this the "everything bubble." As for capital outflows, one can only look at the price of assets used as a store of value. Stocks, real estate, and Bitcoin. This reduces demand for dollars. As for the dollar index and CPI, it's possible to assume these aren't very good values, since things like reverse repo markets and shrinkflation often make the numbers look better than they really are.
Here in early 2022, while hyperinflation is a stretch, alarmingly high levels of inflation do seem to be creeping into the advanced Western economies like the USA and Canada.
@sasa asasasa As bad as all that sounds, hyperinflation is 50% increase MONTHLY, so no, it’s extremely unlikely any first world western democracy will experience anything like that for the time being. That’s failed state territory.
I love ee n urself. So nice to see such interesting and in depth discussions on such an important topic. I love how this dialogue has begun and how u address topics ee raises and the perspective he gives. Congrats I think Ur both on to a really good thing.
Thank you for putting in the research work. I appreciate the academic research foundation that you bring to the table.
Great video, commenting so the algorithm can feature this video. I love how you can support your observations with data. Much respect.
A couple of suggestions, try to not confront EE video so directly, their viewers can percive that as an attack, and create artificial drama.
Try not to show or mention anything that involves "some people that ruled Germany in the 40's", you can be demonetized or the video could be put in the shadows and not be recommended.
Overall awesome content, thanks for the insights.😀
Thanks for the tips Antonio. I've thought about both of these when making the video. It's a fine line for me. On the one hand I think it is important to be polite and good faith (I tried to do so) on the other hand I don't want to mute myself completely in the interest of pleasing everyone :) . A similar logic applies to the second point you made, I don't want the video to be demonitized but at the same time I want to be able to refer to history as it happened.
I appreciate the feedback!
Him mentioning about EE is what piqued my interest though haha.
@@MoneyMacro and @Aftermath: Same here, as I don't follow that channel at all, but did randomly watch the video in question...and it didn't sit well with me one bit.
It's not my area of expertise though, so knowing the exact reasons it didn't sit well was a bit of a challenge.
Calling out misinformation is important, and it's exactly why when this was in my feed I felt the need to watch. Glad I did.
It seems that this video was meant primarily to evaluate various contentious points made specifically in EE's video, and as I never would have found this video if not for the name, it would be somewhat pointless to attempt to promote discussion and fact checking of specific content if the people who watch the first video never watch this one.
Great video, love the sources in the description, i'm always concerned when they aren't there for videos that cite major argument points.
22:40 - Honestly I'm being really extraordinarily pedantic here but I just want to make one very, very, very small correction: The decision on the partial revaluation was by the Reichsgericht which wasn't technically a constitutional court in itself but the supreme criminal and civil court of the German Reich. Though there was a connected "Staatsgerichtshof für das Deutsche Reich" which dealt exclusively with constitutional matters of the "Staatsorganisationsrecht" (state organizational right/law - no idea how to properly translate this thing) your source makes it clear that the ruling by the Reichsgericht was a decision of civil matters ("Entscheidungen des Reichsgerichts in Zivilsachen").
Again: Sorry for being a history nerd who's clearly hanging out too much with far too many law students ^^
Fantastic video nonetheless of course. Taught me a lot, especially about the debate on asset and consumer price inflation!
Hehe no worries I totally appreciate this :)
Great research. Thank you for putting this out there!
I'm always looking for well researched channels that don't just rely on affirmative phrasing to come across as informative. Thank you for this video.
My pleasure!
In the USA at least you actually can almost always pay off your home loans early with only a small (or even no) prepayment penalty. But it is still an excellent response video that you did other than that.
Thank you for this! I only have a bachelor's in economics and it all didn't seem to add up. However at the same time it also seemed so convincing. You made it so much clearer and better then the "common sense" meets economic theory style!
That's the sad part of convincing, you just need to be seem to be right but not actually be right
the part right after "while looking out from your nice Berlin flat.." was absolute gold. Had a good chuckle over it!
This channel is SO important!! There are so many people making shallow analysis like EE on a number of topics which never get challenged. I love how you seem to really disprove your own findings and keeping an open mind.
I also don't think it is entirely by accident that you happen to be Dutch. I think in the Anglo-Saxon world discussion of topics like this seem to get hampered too much by deep ideological beliefs. I know Dutch people to be very pragmatic and no "bullshit" kind of people.
Anyway keep up the good work! I really like your style and choice of topics.
While otherwise a great video, you make a link here that is a common confusion even in Germany. The hyperinflation in the Weimar Republic was NOT the crisis that can be directly linked to the Nazis rising in power. This was ~10 years later in the Great Depression, which was caused by deflation, so basically the opposite.
I tried to be a bit careful with the causative argument. You are right there was deflation as well later. But did that sow the seeds for Nazi rise or .... Was it the hyperinflation from before. .. or the combination?
I agree. To further clarify, hyperinflation was among the distant causes, but far from being the direct cause. Hyperinflation did cause Allied occupation of the Ruhr, which makes the fascist messages more appealing, but hyperinflation did not cause a total collapse of Weimar economy (it was on its path to recovery before GD hit and American investors pulled out their money from Germany which cause massive unemployment).
@@MoneyMacro Well, there were the roaring twenties in between, so I would not expect people to still be too concerned with the previous crisis. But yeah in general there were obvious many contributing factors (a lot not even economic). I was more hinting at the scene where you see Nazi soldiers in front of the flat you just bought in the hyperinflation crisis, which if you don't know better, makes a link in time that just isn't true and again is a very common misbelieve.
@@MoneyMacro I already commented something similar in the other post, but just look at the 1928 elections. Nazis and other right-wing parties barely got any votes there. (Communists did well, but they appealed to a different demographic than the Nazis and their success is a different topic.)
This has become an interesting thread. Thanks!! I'll add it to my list of nuances.
Thank you, I really love ur channel, you're undoing some of the "harm" that EE does to people who doesnt know much about economics. And let's also not forget that besided the dollar being the reserve currency and some people say it's "backed by nothing", but the whole US political apparatus and military are it's backbone.
True, just never ask these people what currency the US govt. accepts their taxes in.
I always wonder what people think would happen if a country holding our bonds says “Hey! Pay us now!”. Wed say now or just bomb them into next week. Weve done so for less.
@@videovoidtv But at the same time, bonds are contracts and no one gets to screw anyone over on those. I've heard talk of the US government defaulting on its debt all my life, but the fact it's easily making its interest payments and could also easily increase its debt many times over if spent in a way that doesn't destroy the economy, though I certainly wouldn't support that.
Does Trump or Biden give you most hope? Perhaps Kabul as an example of military? The pink haired generals?
@@LLlap What? I'm sorry, but I don't really care who the US president is on matters of war, they should just stay in their home and that should be it. Would they do it? Nah.
What is happening in Kabul is simply the US seeing that staying there isn't in their favour anymore, so it's just going to leave the mess behind. But anyway, they still do have the military capability to destroy the shit out of them(obviously with tons of civilian casualties).
And fighting a terrorist organization is much more different than an Army.
I appreciate you bringing attention to underlying assumptions. Many people oversimplify things or even dismiss things for personal reasons. Their logic that makes sense then falls apart given more information.
Fantastic video, excellently sourced. Please keep making more.
As someone who had lived during Yugoslavia hyperinflation, EEs advice was spot on. We had paid off our apartment for 2000 Deutsche Mark, but this was still too expensive, because people paid off apartments for a value of a bag of candy.... so, yes. Even though we had trouble in our day to day, we now have an apartment to live in... And yes, we later saw bombs falling, and things happening, and lack of everything - everywhere, but after all that, apartment was still ours...
Of course this does not hold anymore for 2022.
You don’t know what hyperinflation is then…. Call me when we’re at a 100% inflation rate.
I'm glad I've found your channel. Keep it up!!
Hello M&M, just found you and I enjoy the academic work on the hyperinflation stuff. I had a problem with the inflation theory to begin with so thanks.
To be fair, I believe this channel just as easily as EE. I'm not an economist, and you can convince me of anything if your logic makes superficial sense, because I have absolutely no clue.
And if another channel 'debunks' this video and I happen to catch that, I'm on their side again.
Ad infinitum.
good vid, commenting to boost algorithm, use to watched EE content a lot, as soon as i saw the title i clicked; always good to look at a well constructed arguments aganist something since if the orginal argument was well it should hold up to research, interesting to see how flimsy EE's evidence was.
I appreciate your videos. It is to show that no one should take content on RUclips at face value.
I feel like your explanation specifically about exchange rates and the drop in the value of the US dollar cant really be compared to a bread basket of other countries. It’s not like the US is the only country that went through covid, if there was a decrease in the value of the US dollar due to covid, there almost definitely would have been a decrease in the value of nearly every other currency as its a global pandemic.
It's not a perfect comparison though given that the U.S. has struggled with the pandemic more than most Western countries.
The US was less effected by covid than most western countries. Many countries saw their gdp drop multiply times what the US experienced. This video is mostly wrong. Money printing does not create linear inflation; you have to subtract increases in productivity. There's really no way to calculate it, but it's very obvious that supply chains are still clogged and productivity decreased. I can't think of any sector didn't see massive price spikes.
And the "industrial production" data used in this video are not a stand in for productivity. Most productivity in western countries is non-industrial. Also the top stock market profits are also not an appropriate stand in for that question. The largest companies did the best during covid.
Thanks for the insights! As an extension to this video, could you comment on the global supply chain shock caused by the pandemic, which I also don't think EE touched in his video? As I understand it has not resolved yet; anecdotally I've heard container shipping is currently x7 pre-pandemic costs. What effects would this have on the US CPI? (I imagine inflation, at least in the short term until the supply chain issues are resolved)
That has to be the politest slapdown of sloppy analysis I have ever seen. Kudos. Subscribed.
I appreciate both of your videos; and you can each only benefit from the professional commentary and interaction. Also, when I listen to any economic predictions, I keep in mind that economists make meteorologists look very accurate. :)
Love your channel! Regarding housing investment during high inflation periods, I believe there is an example of this being successful. Mark Blyth describes the banks essentially taking a loss on mortgages in the 1970's when interest rates were around 17% but inflation around 18%. Certainly not hyperinflation, but it does seem worth mentioning
Yeah to be honest it's an interesting idea.
Amazing. Economics really goes over my head and this was very engaging. Thanks!
I'm glad to hear that.
Economics is both non-intuitive and probably the most publicly misinformed topic in both politics and media. I love economics but I hate its public profile.
this is such a great video. thank you very much.
as a new investor, its very hard to come by credible sources.
its really nice to hear such a thorough work presented, from an educated economist.
keep 'em coming.
I always enjoy another prospective on a topic, thanks!
23:36
my dad had a meeting with his bank on the 17th of October 2019 to get most of his savings transferred to his bank account in the US... but the protests started 3 days earlier so i guess my family and i arent part of that group who was lucky enough to do so.
My God! As a Venezuelan I felt insulted when he said that hiperinflation was due to sanctions. This were only enforced on direct government officials and Venezuela had a huge deficit even when oil was a hundred the barrel.
Excelente vizinho.
To say that house prices isn’t part of inflation - because it’s not part of official measuring - is an anti factual statement - inflation is inflation in all its form and shapes - official or not. As long USA doesn’t have foreign debt - it’s unlikely that trade deficit will cause major problems.
Fantastic video. Economics is a deeply layered system where when looking at explanations that go one layer deep can appear corrct to those whose understanding is only a single layer. EE's explanations might peirce a few layers, but clearly lack the depth needed to provide a full understanding of the subject he has taken on.
Well done!
When I started seeing videos tearing apart EE I felt sad because I enjoyed turning my brain off and feeling like EE knew what he was talking about, but honestly these calm responses, lacking his telltale dramatic flare actually entertain me more! I unsubscribed from him after his Netherlands video (as you'd mentioned, one tinged I think with his politics) and now I can happily subscribe here. Thanks for doing what you do!
That is the great thing about economists, they all see the world in a different light. I enjoyed this video, but feel like the creator looked online and found sources to easily dismiss items without taking a look at the bigger picture.
You left a couple of digs at EE in the subtitles ;-)
Ahhh no. Hehe.
Great work!! Really appreciate the fact-backing analysis you have made in the video.
Fantastic video. Thank you for your work.
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Looks like it's gonna be an interesting video :)
wow, this channel is sooooooo underrated .... Great explanation, making me think to get a master in econs.....
I was linked this video from reddit - subscribed!
Eyyy, our boy got a sponsor!
Warren Buffett has been encouraging everyone to short the USD by getting a 30yr mortgage, for the last decade, so , no, EE is not the first to suggest that, no.....
Quality stuff dude, keep up the good work.
I always appreciate 2 opposite points being expressed intelligently, its really helpful to make my own mind. Kudos to both channels
It’s not great that the creator of the largest “economics” channel on RUclips has so little knowledge about the economy.
Economics, as a social science, is subjected to a lot of subjectivity; that’s why we have different economic policies.
Just like art: beauty is in the eye of the beholder.
And sometimes economists become very stubborn defending their stances out of pure pride or because they’re following an agenda
@@DarkNightLight68 I hear what you're saying, but this is why we hire so many physicists and data scientists into the field of economics; to sort of remove as much of that as we can through realistic models. And ultimately, you're right that there is subjectivity, but there is a lot of this that can be removed through proper analysis. The unfortunate part of this, however, is that these techniques are hidden away from the general public and not well understood by the masses. It's difficult to create talking points around these complex models.
@@keris3920 Even with the best analysis you can’t eliminate subjectivity; an analysis is subject to interpretation and we can reach completely different conclusions from the same analysis because we all inconsciously apply our own biases. No amount of secret techniques can help us with that. That’s the importance of dialogue, we can hear different opinions and different points of view so we can put a little of introspective to our conclusions
@@DarkNightLight68 reread what I wrote. I am not talking about completely removing subjectivity, I am talking about removing SOME subjectivity. We have models that are capable of predicting economic trends with pretty high fidelity... And yet, here we are, watching videos with nothing but high level details that have very little evidence to back them. That, in my opinion, is what is wrong with discussions we have with respect to the economy.
@@DarkNightLight68 I mean, subjectivity is one thing, but it's pretty clear that EE has seriously misread the available data.
S&P500 P/E (price to earnings) ratio has indeed exploded, but that can be explained by low interest rates. If you want to stash your money somewhere, you have no other choice than the stock market (or housing). Everything else pays less. When the fed raises the interest rates, the stock market will come down.
I love the channel :D
you could hedge by buying calls on inverse interest ratio ETFs :P
Money & Macro, what a great video. I like EE's page as well, and I also have a graduate degree in economics. What you've unearthed is that there is more nuance, and more complication to the whole story.
So happy to see the research on this topic. Excellent!
Great video! I love the bits and pieces of yourself as animation!
Thanks this was my attempt to rely less on stock footage
@@MoneyMacro worked out great imo! Very creative, haven't seen it before.