As someone majored in industrial engineering, I want to point out that just-in-time systems were known to be fragile, and I was taught that it's more of a concept than something that actually should be executed by the book due to risk evaluation. What really should happen is that a good engineer should identify areas where the risk to supply chain is high and keep higher stocks in those areas, and drive areas where the risk is low to be more lean. However, companies, especially with its shareholders, will push aggressively for that magical "just-in-time" system regardless of risks, as it improves short-term profitability/price competitiveness…
The thing is if you have two businesses building cars one is going 100% to just-in-time and the other is taking a safer approach then the first company will constantly outcompete the second. Once the next crisis hits the second is already bankrupt. This is why we need regulation to handle this. Our economy will always push towards higher and higher risks when there is a long time of stability.
@@devluz You don't need a major crisis to wreck the JIT company. The difference in efficiency reduces margins slightly with stock piling but it's not definitive, it won't be enough alone to send them bankrupt, but the JIT company will experience enough disruptions over time through good and bad periods that overall profitability won't be greater and bankrupcy more likely. I've seen this in real life, not theory. Toyota for example implements philosophy intelligently as is appropriate, not idealogically and absolutely, that's why they are still around. The devil is always in the detail. Managers don't deal well with details...
@@devluz That's why I had price competitiveness as part of the reason why share holders would push for that just-in-time model. Now, to be real, I think if the shareholders and executives are willing to sacrifice short-term profitability for long-term stability by taking less payout, the price competitiveness can still be achieved. But yeah, the way how a "free market" functions is quite unfriendly to long-term planning. The worst part is that the system is showing its cracks, but we still haven't found a good substitute…
Well, alot of the modern global economic system has hurt the middle class and created more poor. In the United States at least. Offshoring may have resulted in cheaper goods, but it also took good jobs and sent them overseas. Where cheaper labour was exploited both in pay and how they have been treated. The environments of these counties destroyed. And the real winners are corrupt politicians and corrupt buisiness men. See china, Brazil, and India for example.
@@Jac486 Somalia or Bangladesh or Haithi are capitalist too, ask an average Joe out there if he is safe from all troubles thanks to the riches that capitalism brings about
Toyota who created Just In Time, practice it very differently to most major corporations. They selectively stockpile certain products, to avoid disruptions. Like microchips, which is why they weren't as affected during the shortages
I also mentioned this in my comment, but yeah, Just-in-Time is more of a concept than something to be executed on by the book. It needs to be used together with proper risk evaluation, and only in areas where the risk is low would you try to push for a leaner logistics chain…
I work in the supply chain industry, and Just In Time is a scourge. It is a policy advocated for by private equity ghouls after they buy a company and it demands heavy concessions to all other business considerations such as lead times, service levels, and employee morale. All of this is sacrificed in the altar of efficiency. These people will employ brutal methods to hammer out even a single extra percent of efficiency. Just In Time is also what totally doomed our supply chains when COVID hit. No one anywhere had any back stock to work from. There was not buffer or cushion.
Imagine being a younger millennial, seeing the effects of the 2008 crisis, currently dealing with the effects of a giant market bubble, hyperinflation, being unable to buy a home and trying to stay positive 😅😭
According to Bipan Rai, North America director of FX strategy at CIBC Capital Markets, "there is growing concern that incoming data is showing that the Fed may be slightly behind the curve than perhaps they expected heading into this year." More red than green is seen in my portfolio. How are other people in this making huge sums of more than $350K in this downturn?
Sincerely, unless you're shrewd yourself, it would be wise to seek advice straight away. We are in a severe recession, and everyone is running out of money, I can tell you as a business owner in both the service sector and as an eBay reseller of all product categories.
@@trazzpalmer3199 I agree, that's the more reason I prefer my day to day invt decisions being guided by a init-coach, seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using a init-coach for over 2years+ and I've netted huge.
@@graceocean8323 we’re only just an information away from amassing wealth, I know a lot of folks that made fortunes from the Dotcom crash as well as the 08’ crash and I’ve been looking into similar opportunities in this present market, could this coach that guides you help?
My Financial Advisor is MARIA JULIANA RAMIREZ. I found her on a CNBC interview where she was featured and reached out to her afterwards. She has since provide entry and exit points on the securities I focus on. You can run a quick online research with her name if you care for supervision. I basically follow her market moves and haven’t regretted doing so.
@@graceocean8323 She appears to be a true authority in her profession. I looked her up online and found her website, which I browsed and went through to learn more about her credentials, academic background, and career. She owes me a fiduciary duty to act in my best interests. I set up an appointment to use her services.
As someone who's worked in manufacturing for my whole adult career, I've always thought that the ability to "just send it to China where the labor is cheaper" limits manufacturing advancements because there is less incentive to innovate here when it might be cheaper to offshore (though we typically neglect the cost of poor quality that correlates to offshoring). If that drives more domestic innovation, perhaps there's a (minor) upside if this plays out the way portrayed in the video (not saying it outweighs the negatives)
One thing that no one talk about is the cost and waste of overproduction. I was stun when I realized that half of what is produced in fact end up in landfill straight out of the factory in order to keep the price high... This should be a topic worth exploring.
That makes absolutely no sense. What's the business sense in producing twice as much as you have to, when you can just _not_ do that and save half the cost on salaries and operating costs with the exact same supply reaching markets?
@@fanbuoy9234 Subsidies and minimum price guarantees are a factor. I've heard of this happening in the agricultural sector. And it happened with the U.S. airlines during the covid lockdowns where they were paid with tax dollars to fly empty planes around the country. I'm sure there are other factors and other industries with similar outcomes. The examples I'm familiar with mostly have to do with well-meaning but foolish government policies or cronyism.
“Hoping for new technologies to save the day is a risky bet to make…” Wasn’t this the crux of the Australian Government’s environmental plan in 2022? 🤣
To be fair, technology has saved humanity every time in the past when people predicted doom and gloom. For example the prediction about not being able to feed the population has been broken consistently by advances in agriculture and genetic engineering. Even the COVID pandemic which could have been like the plague in in history was fought off relatively quickly and without mass death due to advances in vaccine and medicine. Robots might spell doom to human labor but it may also solve the demographic crisis in many countries.
@@xiphoid2011 yes, but not good to base your plan around hopes and dreams. New tech should make you change the plan … the plan that was based on current tech.
@Scott Bowser Agreed, a certain amount of conservative planning is warranted. At the same time, it's over pessimism is just as bad as over optimism. Too much optimism leads to bubble, but too much pessimism mankind would never have venture forth and we would still be primitive cavemens.
@@xiphoid2011 Humanity has the capacity and resources to create technologies that will save our system and planet from existential threats. The problem however especially in a majority capitalist leaning global economy we are in today, is that leading businesses prioritize maximizing profit over welfare. Although profit and welfare can coexist, maximizing profit on the other hand, more often than not, compromises the long-term welfare of society in favor of addressing the short-term expected profit for executives and investors to benefit from. Therefore technologies being developed by private companies (government agencies always outsource tech development to the private sector) that are beneficial long-term to save humanity from existential threats get scrapped as it costs a lot of money to develop which lowers down the short-term profit margins (therefore bad for business). As long as our economic system prioritize short-term profit maximization instead of ensuring the welfare of society long-term, humanity is sure to have a dead end in the very near future.
Roubini always predicts an economic collapse, but I sympathise with him because he legitimately looks at the fundamentals and makes sound predictions, what he doesn't factor in is the sheer scale of the scam going on with central banks and their willingness to never let markets crater no matter what.
Yes, no logical individual anticipated that central banks and governments would create trillions of dollars in debt to support bubblicious asset prices. The consequences of their experiment have just begun to reveal themselves.
Always happy to see a more scientific understanding of economics instead of hearing the ramblings of the left and right. Thank you. One idea: could you cover the economy of Victorian England or The Gilded Age? Both are examples of early capitalism with very little regulation, possibly emulating some of the issues of Laissez-faire capitalism promoted by hard-line libertarians.
I love that you are uploading the videos to Spotify now, I greatly appreciate that! I just wish your uploading script didn’t broke and actually uploaded the latest episodes instead :D
Shouldn't the more pressing worry is that all of these megathreats are happening at around the same time as a chapter 7? So even if you somehow avoided 1 or 2, the others would still be devastating?
The mega threats are always looming. Usually, all at once. The beginning of the twentieth century saw several pandemics and two world wars. If you actually read history, the last 70 or so years are exceptionally free from threats.
Wow EE 🎉 getting to interview Dr. Roubini is amazing! Congrats on the channel’s growth! (everyone remember that growth takes shape in various creative ways, like this!)
I love all your videos but I think this has to be my favourite one to date. Not many people know the economic complexity of globalization and I think this video does a phenomenal job at explaining it (or at least the basics). Absolute love it, thank you!
Peter Zeihan’s recent book “The End of the World is Just the Beginning” (2022) was extremely amazing in this area/subject. He has quite a few interviews on RUclips that are only about an hour long that really give all of this context. The book, though, is really good.
America has accumulated debts and pledges that it cannot pay. This problem has developed over several decades under both Republican and Democrat administrations. It is a fundamental failing of liberal democracy. People keep voting for more government and more government handouts until the economy collapses.
Regarding Australia exporting raw materials instead of processing some portion of the end product. I would love to see an episode regarding the economics of importing low wage (guest) workers to carry out the manual labor jobs the local labor force is too high priced/too scarce to complete. The examples which come to mind are the labor required to complete the stadiums for the World Cup or migrant farm labor. Thanks
im a canadian and we have essentially the same problem. Droves of people from the global south spend their summers here picking crops and doing other labour jobs. The resource economy doesnt keep going without a way to harvest the resources.
The problem with importing workers is that the local minimum wage and safety laws still apply. By sending the raw materials to another country, companies can get away with paying workers less than legally permitted at home, as well as often not having to spend as much on keeping workers safe. So importing workers would cost almost the same as hiring locals. As for resources like crops, the same thing with migrant workers happens in Australia. But the only reason they hire them is because they can't ship the fruit trees overseas to get them picked there. You do see it with things like fishing though. A lot of the frozen seafood for sale in Australia has written on the packaging "Caught in New Zealand, processed in China".
@@Edge81 The problem with Erik's idea, he said a company could save money by importing cheap workers, I said that won't save you any money because you have to treat them the same as the locals. Great for workers, no benefit for companies looking to save a few bucks.
@@Berkeloid0 Imo local safety rules and wages should apply. The last thing we want is an increase in local unemployment and a spiral of downward wages and poor working conditions.
I'm pretty understanding of most of these points. In regards to the globalization argument I struggle with huge chunks of this. Mostly cheap energy has gotten us here but as transportation costs go up this argument loses ground. Also, being from Canada we have some enormous mineral/natural resource corporations. I know how our higher dollar and stronger economy has given us enormous control in South America and us mining THEIR resources has made us extremely wealthy but does not work in favour for the average south american. This is especially true of the USA (who we likely learned it from)
Just curious, that $12,234 per capita number, when adjusted for inflation and increased costs of living, how much has per capita buying power actually improved?
Good question, the GDP per capita ppp globally increased from 11,000 in 2000 to 17,000 in 2021. According to Worldbank. So it's not twice as much, but it's a 50% increase in 20 years so that's amazing
@@adamritton5820 Median GDP PPP per capita measured how? By country? By individual? Either would be a simple "list and find out" check away. The numbers are all public.
@@adamritton5820 Because it was so easy, I did it for you. IMF's Median (by country) for 2000 was $5893, while it was $15,556 in 2021. By individual would be more "median", but since China was far below median in 2000 and far above it in 2021, that growth would probably be even more staggering.
That's the democratic election cycle of 4-5 years on average. China doesn't have that problem as there are no election so they can plan 30 years in advance etc.
Politicians care about being elected. The people who elect them care about short term. The problem with the long term solutions offered in this video is the same issue politicians face. Even if you wanted to promote sound long term solutions it doesn't do you any good if you can't get elected and get into a position of power to start with. I am not defending politicians because most of them are very selfish with their motives, but you can't blame them when you are the one that is voting them into power. In a factious system you may have to stop voting for your most likely to be elected candidate to the candidate you actually believe will make the changes that are wise in the long term. Those in China need to apply.
@@snowflakemelter7171 Which explains why they tanked their demographics with the One-Child Policy and tanked their economy with zero-COVID. Also the same country that is building even more coal power plants and painting mountains green to promote the facade of environmentalism...
Completely agree with the megatrends. I would add the fact that the excessive opportunism and short vision in the technology industry has developed a worrying state in which people's privacy is being massively violated for profit. There's no future without privacy.
Globalisation has been an unmitigated disaster for the American working class. In 1970 a factory worker or mechanic could support a family with a single income. Today, with two or even three paychecks, it's a struggle.
Back in 1970 many families were single income. Now many families are dual income. This means there is more money chasing around products for the same number of people (or fewer, as families shrink). As the other poster pointed out, there is also more people chasing jobs so the labour market responds by wages growing more slowly.
@@HH-le1vi entered in droves? It took decades to hit 50% participation for women in the workforce and most jobs were menial low paying jobs. You just want to blame women.
@@patrickbateman1660 women didn't go to work much until WW2. Its just how things were. And I'm not blaming them but you'd have to be ignorant to not realize that people seeing 2 incomes in a household means they can afford more house and thusly prices go way up to account for it
I live in an advanced western economy. Your assessment of a "golden age of economic prosperity" just looks at raw numbers on spreadsheets and is entirely divorced from reality. My city has an ever-increasing number of pensioners and retirees living in their vehicles, and at 40 years old I have had to find a roommate to make ends meet. At the end of the month, it is common to have to choose between the food bank or going hungry. I have a good job and make above the median wage for my area. Give your head a shake.
Nice chart at 3:34 but are these based on resources or reserves? For mined commodities, e.g. copper, iron ore, gold, uranium, the resource is the estimate of the entire deposit; the reserve is the subset of the resource that is estimated to be economically viable at current prices for the commodity. This is an important distinction as each option would deliver wildly different results, and it's not clear from your graph which of the two it is.
While your ranking system does include "stability" but you don't explicitly use a dollar amount for that ranking. One reason for the end of globalization is the realization that there's a social and economic cost (risk) of not being self-sufficient, and real costs associated with the security concerns involved. But gov't spending on security is (at least here in the US) an industry in and of itself. The irony potentially being that we use Chinese investment dollars in US bonds to fund our security apparatus to keep the Chinese security threat in check!
I always wonder what the point of replacing everyone with machines might be. I mean if nobody earns anything anymore, what's the point of having an economy at all? Who's going to be buying anything? How will everyone eat? Am I missing something?
Functionally, this year my wage was worth less than it was last year. This has been going on for a while. The size of the pie might have grown but I am getting less of it every year... and that is by design, not accident. De-globalisation will give me more power and corportions less power... I am all for it.
@@flakgun153 Yep, because the food most people consume certainly doesn't come from within the same country, let alone state. Coffee and chocolate are the easiest examples; how much coffee and chocolate is consumed daily in NYC vs produced in NY state (or even the entire USA)? And that's only one city and 2 food types. Expand that out amongst all foods and cities, then expand it out to other goods. Live in a country that doesn't produce cars? Have fun walking! Imagine how well that'd go down...
@@andrewcole9824 it has done a lot for the masses. You mean the masses of the most advanced economies, those are the only group that have reduced their wealth.
@codybagelstein2235 That also means 130 countries without emergency services vehicles. Have fun waiting for the horse and watercart when your house is on fire if you live in one of the 130.
My perception of the world is similar to the Billy Joel song “we didn’t start the fire.“ my perception is that the world has always in someway been on fire. There are only a few firefighters who can put out the fire, but there is more fire than fire fighter.
Can you do an updated video on automation and if technology can become advanced enough to replace humans, meaning artificial labor? One of your first videos ever was on this topic, "The Economics of our Machine Future". But that was several years ago. With new technology released recently like ChatGPT, and actual humanoid robots powered by Artificial Intelligence being actively worked on by several companies, the time is great for an updated video.
I always wonder how can the typical family with average income afford a higher rate+ more expensive home? in my area multi generational home is becoming the norm . Don’t forget to add the inflation which just this week was 9.1 on the CPI , producers index 11.3, it’s going to be a rough ride for sure
I'm sure the idea of a coach might sound generic or controversial to a few, but new study by investopedia found that demand for portfolio-coaches sky-rocketed by over 41.8% since the pandemic and based on firsthand encounter, I can say for certain their skillsets are topnotch, I've raised over $500k from an initially stagnant reserve of $150K all within 14months
@@selenajack2036 that's impressive!, I could really use the expertise of this advisors , my portfolio has been down bad....who’s the person guiding you
The problem with "comparative advantage" globalism is that is assumes a fair and orderly world, which you can't have without a unilateral hegemony (though perhaps you could with a decentralized blockchain-directed anarchy... maybe). You can't have unilateral hegemony in a world with multiple competing power centers working from adversarial ideological positions. This is not hard to understand.
What’s missing from this video: How using averages is misleading without showing a distribution curve; how politics drives many of the world’s economic problems such that many economic solutions are rendered worthless; talking about wages and how wage growth has been stagnating as GDP rises; and tied to the previous issue… income inequality is driving much of the push against globalization. It would also be nice if there was talk about how economically inefficient military spending is and how it reduces economic activity unless there is a war… aka killing people en masse.
EE could you make a video on short-termism of companies and how it varies according to different countries/legislations? Is there economic research that suggests how to solve it?
Yes, NR has forgotten more about economics than I will ever know. However, as a matter of fact, the UK is not in recession and is not expected to enter into one in 2023. The same cannot be said of Germany.
Britain’s current economic challenges are not unique and at this point in time can’t be blamed on Brexit. While it’s inflation is high it is also on a similar level to most developed countries. It might be different in five years time when most of the problems caused by locking down the world’s economy are resolved.
Love it! Thank you for calling out my fellow, albeit mostly clueless, Americans. It's true that we tend to forget about the rest of the world. It's not completely our fault, however, as our economy, geographic size, geographic location, population, immigration, etc., are so much larger than so many other Western countries. Oh, and those (entire) oceans on either side of us, our southern and northern neighbors, all add to that objectively very real separation. Europeans can start out in London and drive a personal vehicle, passing through entirely different countries in a single day; yet, if I were to drive the same number of kilometers from around here in western Virginia heading west, I would still be deep within the US. However, that does not excuse us from our collective failure to more actively seek out the rest of the planet's different perspectives; and, more importantly, make an honest effort to keep them in mind. But, that really only works both ways.
9:50 This value of this aspect of having debt is impossible to understate, and in every situation, this value is almost nothing compared to having a smaller debt burden.
I think that, like a previous EE video mentioned, no two crises are the same; so I don't think the collapse of SVB will have an impact similar to anything before it. But it'll certainly be significant, specially once the western wave it produced hits the eastern one of China's collapsed real estate market and ensuing bank runs that they've had since late 2022. I think SVB will probably lay wreck to the US tech startup market, and uncertainty regarding runner-up China leading many VCs to seek refuge in emerging economies like India and Latin America (whose corps generally have much, much lower P/E ratios) or, for more conservative investors, Estonia and Israel, at the detriment of existing tech hubs in SF, NYC and Seattle. Still, it's usually hard to predict the future as it is, but with the emerging AI revolution, it'd take only a single killer app to change the global market irreparably. Didn't SF become the tech capital of the world just because one of Intel's founders set up shop there to be closer to his mom, I think?
Not even close. Lehman Brothers was 3x bigger when it collapsed and triggered the GFC. Ironically enough, one of the heads of SVB was also one of the heads of Lehman Brothers and they both made terrible decisions that caused the collapse of each of them.
I like your videos, they're informative and entertaining. A request: can you put a place name with the images? Especially in this video where you show imagery from all over the world, I'd love to see where it's from.
A major facet of globalization is unequal exchange, its blatantly obvious even in the simplified technology export examples you gave. Globalization did increase wealth overall, but unequal exchange ensured that its distribution was heavily skewed to those who were already rich (both the billionaire class and the western aligned).
Oh companies did a whole LOT more than "pass on the costs to their consumers", in fact, they RAISED their profit MARGINS by 300% in a year. That provided about half the cost increases to consumer found in "Inflation"....
Incredible video and learned so much. Understanding these broader concepts is really important - the modern world is incredibly complicated, and ripple effects have many unexpected consequences. To be clear - I don’t understand any of it 😂 but I’m so excited to listen people who do understand discuss it and lay it out so clearly for the uninitiated. Economists seem to have some sort of sacred knowledge in the modern era
The world is so interconnected now that any issue with any country will caused a significant ripple effect to the world economy. Conflicts are getting even more dangerous
Generally whichever conflicts if not dealt properly will cause serious issue. Like Ukraine war caused food security issue. Any escalation might result in nuclear weapons used. Taiwan conflict if not dealt properly will probably cripple the whole world economy
Yes, these conflicts are known to cause shocks in the stock market. In some industries like oil, it has played out in their favor, the rising oil prices increases the share value of those firms. While in other sectors, such as semiconductor manufacturing in Taiwan, the share value of that sector has fallen due to the risk of a Chinese invasion.
Another superb creation. Thank you. Would love to hear your thoughts (perhaps a topic for video?) on the topic of What is the cost burden on developing economies that do not follow basic principles like lane driving. How it could result in inflation as a result of second and third order consequences. How it could result in low productivity due to increased time spent in commuting. How economies could lose their valuable productivity contributors (youth) due to increased deaths on the road, and so on... Once again, thank you for creating so much valuable content and would look forward to more content.
Tie it in to the changes wrought by remote work/lesser commuting aaaaannnd the new push by employers to force workers back to the office. You'll get a neat little bow at the end.
Hello EE team! I absolutely loved this video, but what I would love even more is for you to make a video about my country - Bulgaria. There's a lot to be covered in regards to such a small country, however, I would like to see such a video surface on your channel.
Vid series idea, an overview of the transition from one global reserve currency to another. How/why did currency A collapse? What made currency B the attractive option amongst its competitors? How long and hard was the transition from the 'losing' currency to the 'winning' currency; split across modern notions of lower/middle/upper class income brackets? Are there any parallels to the modern global economy and historical economics based on global social saturation of the period specific reserve currency?
BRICS seeks to create a new currency, considering gold's historical role as a store of value and medium of exchange. However, the functionality and acceptance of a gold-backed currency in the current global financial system are uncertain. Creating a new currency requires careful consideration of economic, political, and logistical factors.
The discussions and proposals surrounding BRICS nations' potential use of gold are intriguing. People choose to buy gold for various reasons, such as its historical role as a store of value and medium of exchange, its potential as a hedge against inflation or currency devaluation, and its relative scarcity compared to other commodities. Gold also offers diversification benefits to investment portfolios due to its low correlation with stocks and bonds.
I find gold investment reliable and aim to buy more to recover losses. Silver is also a good investment but differs from my collectibles. Clear investment goals and education are crucial. I work with Margaret Johnson Arndt a SEC-regulated financial consultant. Starting with modest investments, I accumulated nearly $799k over time.
I thought investors were to help grow businesses - not milk them like a cow. It’s a perpetual growth. Companies reach level of success but are expected to continue expanding their profits. What if we put a cap on capitalism… what if we got investors out of corporations after corporations reach a reasonable plateau?
That makes no sense. A company needs incentive to grow. Those investments give them resources to grow. If you get rid of investment you'd have a worse version of today where the massive companies control everything cause they're the only ones who can afford to do anything.
One major omission in the list of big issues: financialisation. In the past companies made profits, gave their workers a raise, invested in the company and then paid shareholders. Now companies use profits to buy their own shares and reward senior managers with shares and produce healthy dividends for shareholders. Employees get crumbs. The rich devote their time to avoiding tax on their wealth while wage owners cannot escape taxes. The divisions between rich and poor are headed in the direction of the nineteenth century with a new servant class- not in the sense of living in but providing the goods and especially services for the wealthy. They provide security, specialized tourism, pet care, education, financial, health, gardening etc services. Meantime, incomes of the majority are stagnating or declining and public services get ever worse. So the missing element on the list is the model of capitalism itself- it increasingly fails the majority
Hi EE Team - love this video. Can you please provide source links for studies mentioned in the video? I am particularly interested in the WB / IMF study mentioned by Dr Roubini (identifying 80 countries facing debt burden headwinds), but could only find WB blogs on the subject. Thank you!
The debacle with the ship blocking the entire Suez Canal goes to show how JIT is very fragile and can't be relied upon long term. In factory warehouse a single loose screw in a wrong place can stop the entire system for hours. Now stretch that to a global scale with billions of different types of possible loose screws in the system, that can block the entire global-scale system for weeks. Like with everything in life, moderation is key and systems should be a mix of both JIT and multiple JIC fail safe systems on top if anything goes wrong. Because more there are variables, more guaranteed it is that something WILL go wrong.
The global economy is like a drug addict chasing their highs. Constantly chasing unattainable highs until a massive comedown each being worse than the last.
3:36 Because of the amount of money it takes to actually live. Especially regarding housing. There's a reason why economic growth was large during the Pioneering Days. Because people weren't bogged down by rent. And just went right to mining or cattle ranching.
4:14 comparative advantage is a euphemism for labor price arbitrage. 9:33 someone's debt is someone else's asset. In other words global debt is just another indicator for wealth inequality 18:38 capital is just someone's profitable plan for labor
A decrease in globalisation means a spreading of "risk" across countries, improves diversity of equipment, upskills a workplace to perform more tasks allowing for adaptability to changes in production
Just in time is a classic example of efficiency versus risk ratio. It works wonderfully ... until it doesn't. So YBGIBG (You'll be gone, I'll be gone) economics favors supply side economics while impacting demand side economics. Thank you Milton Friedman.
I'd like to know if _Just-in-Case_ manufacturing is better or worse for a country's income inequality. Both in general and considering rising prices. (Yeah, that last piece depends on the kinds of goods a country produces, so while growing more food at home _might_ be better for ordinary people [typical workers and consumers] but if the economy is based on luxury megayachts then I guess that could end up sucking for the locals regardless of its effect on wages.)
I actually agree with globalization to an extent. I live in the US and I agree with importing some things. Other things I think we should make internally. The more high tech I think it should be kept in house and anything that is high value low resource input.
@@kyle857 well it is a matter of national security for everyone so should everyone do everything themselves? Countries specializing in specfiic products and services is probably great in times of peace and might even maintain peace between nations if we rely on other nations then we are less likely to go to war I think.
@@glens18account Tell that to the Europeans once dependent on Russian gas. Interdependency can be used as a whole lot leverage if one side is willing to go “all in” while the other is trying to maintain the status quo.
@Tom Blaise yes we trusted on the peace by mutual dependency it should bring. I just couldn't imagine Putin being this irrational. Actions before the war in Ukraine where often evil but at least made strategic sense for Russia. This war hasn't....
@@dekippiesip Russia is coming off much worse from not selling it's fuel than by any european country not having access to it. After this war, Russia is going to be in a really seriously bad economic state, maybe in a year from now.
Couple of questions: Does globalization's attractiveness end when poorer manufacturing countries raise their living standards to a certain level? i.e. cost competitiveness goes away Does the end of the petrol dollar start a downward spiral for US currency/economy? How would that look like? What would happen if stock buyback is banned? What would happen to the stock markets? 401k? Contagion impacts?
1. Instead of thinking in terms of countries, lets think locally in terms of states in your country or even cities. Lets say your town has a tire factory, it is very unlikely that the next town is going to build a tire factory. It is easy to just get tires from the next town. Building factories is expensive. So, even if poor countries get richer as China is getting right now and demand a similar wage as an US factory worker, building new factories instead of just shipping is still a huge investment and risk and very often not worth it. 2. This is something I have been thinking for a while too. End of petrodollar would definitely decrease the valuation of US dollar but people are reluctant to change and countries would most likely keep using US dollar as reserve currency unless they are given a very strong reason not to do so. 3. Even if it could be banned, it is not very clear how much it will help. The most likely case is that larger corporations will just do some offshore tax haven trickery to bypass the laws.
The problem with that is that history tells us a lot of things that are true...right up until they aren't anymore. History demonstrates that major economic activity requires a coastline or a navigable river...until the railroad came along. History demonstrates that an agricultural-society based army will always lose to a pastoralist or hunter-gatherer army of equal size...until the invention of firearms. History demonstrates that a majority of economic activity will always be devoted to keeping people fed...until the Industrial Revolution. History demonstrates that (discounting migration) a population will always grow, in the absence of something (war, famine, plague, etc.) actively killing people...until the late 20th/early 21st century, when basically every advanced economy slipped below replacement. The "rules" of history cannot be blindly followed, they must be analyzed, to understand what factors make them rules, so we can recognize when those factors change.
As someone majored in industrial engineering, I want to point out that just-in-time systems were known to be fragile, and I was taught that it's more of a concept than something that actually should be executed by the book due to risk evaluation. What really should happen is that a good engineer should identify areas where the risk to supply chain is high and keep higher stocks in those areas, and drive areas where the risk is low to be more lean. However, companies, especially with its shareholders, will push aggressively for that magical "just-in-time" system regardless of risks, as it improves short-term profitability/price competitiveness…
Yeah but when it goes pear shaped we (the engineers) still get blamed cos the AH managers duck and cover.
Almost like Engineers who know their products and industry should lead companies not business majors who do nothing but try to cut corners.
The thing is if you have two businesses building cars one is going 100% to just-in-time and the other is taking a safer approach then the first company will constantly outcompete the second. Once the next crisis hits the second is already bankrupt. This is why we need regulation to handle this. Our economy will always push towards higher and higher risks when there is a long time of stability.
@@devluz You don't need a major crisis to wreck the JIT company. The difference in efficiency reduces margins slightly with stock piling but it's not definitive, it won't be enough alone to send them bankrupt, but the JIT company will experience enough disruptions over time through good and bad periods that overall profitability won't be greater and bankrupcy more likely. I've seen this in real life, not theory. Toyota for example implements philosophy intelligently as is appropriate, not idealogically and absolutely, that's why they are still around. The devil is always in the detail. Managers don't deal well with details...
@@devluz That's why I had price competitiveness as part of the reason why share holders would push for that just-in-time model. Now, to be real, I think if the shareholders and executives are willing to sacrifice short-term profitability for long-term stability by taking less payout, the price competitiveness can still be achieved. But yeah, the way how a "free market" functions is quite unfriendly to long-term planning. The worst part is that the system is showing its cracks, but we still haven't found a good substitute…
"the poor are going to bear the brunt of the impact" is 1 conclusion that can be safely put into any economic analysis.
That's called capitalism
@@superkingoftacos2920 it's more social darwinism
@@superkingoftacos2920 Yeah, because under Capitalism some people aren't poor, while under communism everyone is poor so everyone suffers equally.
Well, alot of the modern global economic system has hurt the middle class and created more poor. In the United States at least. Offshoring may have resulted in cheaper goods, but it also took good jobs and sent them overseas. Where cheaper labour was exploited both in pay and how they have been treated. The environments of these counties destroyed. And the real winners are corrupt politicians and corrupt buisiness men. See china, Brazil, and India for example.
@@Jac486 Somalia or Bangladesh or Haithi are capitalist too, ask an average Joe out there if he is safe from all troubles thanks to the riches that capitalism brings about
The more you learn about economics, the less you know about economics.
This is so true!
Indeed
and the more depressed you get
Applies to every major
These days being an economist is a bit like being a cross between a priest and a sports announcer.
Toyota who created Just In Time, practice it very differently to most major corporations. They selectively stockpile certain products, to avoid disruptions. Like microchips, which is why they weren't as affected during the shortages
Now they are. At first they weren't but these days they have the same problems as every other auto manufacturer outside of Tesla and Mazda.
@@HH-le1vi They didn't predict the magnitude of the disruption that doesn't mean their methodology was wrong.
Aren't they helping to create the shortage problem by stockpiling?
@@snowflakemelter7171 Not if they established their stockpile before there was any shortage.
I also mentioned this in my comment, but yeah, Just-in-Time is more of a concept than something to be executed on by the book. It needs to be used together with proper risk evaluation, and only in areas where the risk is low would you try to push for a leaner logistics chain…
I work in the supply chain industry, and Just In Time is a scourge. It is a policy advocated for by private equity ghouls after they buy a company and it demands heavy concessions to all other business considerations such as lead times, service levels, and employee morale. All of this is sacrificed in the altar of efficiency. These people will employ brutal methods to hammer out even a single extra percent of efficiency. Just In Time is also what totally doomed our supply chains when COVID hit. No one anywhere had any back stock to work from. There was not buffer or cushion.
Imagine being a younger millennial, seeing the effects of the 2008 crisis, currently dealing with the effects of a giant market bubble, hyperinflation, being unable to buy a home and trying to stay positive 😅😭
Here's an "old" millennial is saying the same thing.
think about COVID, you don't want to stay positive 😅
You've accurately described my daily existential struggle.
Getting reeeeeally tired of living through one "once-in-a-lifetime" crisis after another...
You are in the "Weak men create hard times" period.
Depends on your peer group. Alot of millenials got into skilled trades and high growth sectors in markets that weren't overpriced and are doing well.
Wait what? There are counties outside of the USA??? That really was a shocker to learn that. This channel really puts things into perspective
no, it was a joke!
@@luk2k3 oh thanks for saying that, i almost thought there were actually other counties outside of the USA!!!
I'm from India LoL
@peterthefourth176 😂
They aren't real countries just manufacturing hubs and resource extraction colonies.
Watching the numbers come in for each category was like watching IGN shower a game with praise and then give it a 6 out of 10
Lol
i mean, it's above average
@@aronseptianto8142 You mean...
Earth: 4/10 too much water
@@maxis2k and most of it is too salty... yuk 3/10
According to Bipan Rai, North America director of FX strategy at CIBC Capital Markets, "there is growing concern that incoming data is showing that the Fed may be slightly behind the curve than perhaps they expected heading into this year." More red than green is seen in my portfolio. How are other people in this making huge sums of more than $350K in this downturn?
Sincerely, unless you're shrewd yourself, it would be wise to seek advice straight away. We are in a severe recession, and everyone is running out of money, I can tell you as a business owner in both the service sector and as an eBay reseller of all product categories.
@@trazzpalmer3199 I agree, that's the more reason I prefer my day to day invt decisions being guided by a init-coach, seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not out-perform, been using a init-coach for over 2years+ and I've netted huge.
@@graceocean8323 we’re only just an information away from amassing wealth, I know a lot of folks that made fortunes from the Dotcom crash as well as the 08’ crash and I’ve been looking into similar opportunities in this present market, could this coach that guides you help?
My Financial Advisor is MARIA JULIANA RAMIREZ. I found her on a CNBC interview where she was featured and reached out to her afterwards. She has since provide entry and exit points on the securities I focus on. You can run a quick online research with her name if you care for supervision. I basically follow her market moves and haven’t regretted doing so.
@@graceocean8323 She appears to be a true authority in her profession. I looked her up online and found her website, which I browsed and went through to learn more about her credentials, academic background, and career. She owes me a fiduciary duty to act in my best interests. I set up an appointment to use her services.
As someone who's worked in manufacturing for my whole adult career, I've always thought that the ability to "just send it to China where the labor is cheaper" limits manufacturing advancements because there is less incentive to innovate here when it might be cheaper to offshore (though we typically neglect the cost of poor quality that correlates to offshoring). If that drives more domestic innovation, perhaps there's a (minor) upside if this plays out the way portrayed in the video (not saying it outweighs the negatives)
"...but since the global average is exactly in line with the global average it gets a 5 out of 10."
😁
Maths
One thing that no one talk about is the cost and waste of overproduction. I was stun when I realized that half of what is produced in fact end up in landfill straight out of the factory in order to keep the price high... This should be a topic worth exploring.
How about the costs of continually preparing for war and the costs of trying to prevent small and largely beneficial changes to the earth’s climate?
That makes absolutely no sense. What's the business sense in producing twice as much as you have to, when you can just _not_ do that and save half the cost on salaries and operating costs with the exact same supply reaching markets?
@@fanbuoy9234 and yet, this is what is happening with much of our consumer products.
@@fanbuoy9234 Subsidies and minimum price guarantees are a factor. I've heard of this happening in the agricultural sector. And it happened with the U.S. airlines during the covid lockdowns where they were paid with tax dollars to fly empty planes around the country. I'm sure there are other factors and other industries with similar outcomes. The examples I'm familiar with mostly have to do with well-meaning but foolish government policies or cronyism.
Source please. You are wrong but at least we can identify where you went wrong.
“Hoping for new technologies to save the day is a risky bet to make…”
Wasn’t this the crux of the Australian Government’s environmental plan in 2022? 🤣
Thats literally the plan of ever green Initiative in the western world - and behold, renewables are still not up to snuff.
To be fair, technology has saved humanity every time in the past when people predicted doom and gloom. For example the prediction about not being able to feed the population has been broken consistently by advances in agriculture and genetic engineering. Even the COVID pandemic which could have been like the plague in in history was fought off relatively quickly and without mass death due to advances in vaccine and medicine. Robots might spell doom to human labor but it may also solve the demographic crisis in many countries.
@@xiphoid2011 yes, but not good to base your plan around hopes and dreams. New tech should make you change the plan … the plan that was based on current tech.
@Scott Bowser Agreed, a certain amount of conservative planning is warranted. At the same time, it's over pessimism is just as bad as over optimism. Too much optimism leads to bubble, but too much pessimism mankind would never have venture forth and we would still be primitive cavemens.
@@xiphoid2011
Humanity has the capacity and resources to create technologies that will save our system and planet from existential threats.
The problem however especially in a majority capitalist leaning global economy we are in today, is that leading businesses prioritize maximizing profit over welfare. Although profit and welfare can coexist, maximizing profit on the other hand, more often than not, compromises the long-term welfare of society in favor of addressing the short-term expected profit for executives and investors to benefit from.
Therefore technologies being developed by private companies (government agencies always outsource tech development to the private sector) that are beneficial long-term to save humanity from existential threats get scrapped as it costs a lot of money to develop which lowers down the short-term profit margins (therefore bad for business).
As long as our economic system prioritize short-term profit maximization instead of ensuring the welfare of society long-term, humanity is sure to have a dead end in the very near future.
Roubini always predicts an economic collapse, but I sympathise with him because he legitimately looks at the fundamentals and makes sound predictions, what he doesn't factor in is the sheer scale of the scam going on with central banks and their willingness to never let markets crater no matter what.
Yeah it's like that boardroom scene in Margin Call....better to be first.
Yes, no logical individual anticipated that central banks and governments would create trillions of dollars in debt to support bubblicious asset prices. The consequences of their experiment have just begun to reveal themselves.
Always happy to see a more scientific understanding of economics instead of hearing the ramblings of the left and right. Thank you. One idea: could you cover the economy of Victorian England or The Gilded Age? Both are examples of early capitalism with very little regulation, possibly emulating some of the issues of Laissez-faire capitalism promoted by hard-line libertarians.
This is your best video yet as this is something I can share to people who otherwise have NO interest in economics.
Thank you!
Wow EE really stepped up the apocalypse scenarios in this one :D
I love that you are uploading the videos to Spotify now, I greatly appreciate that! I just wish your uploading script didn’t broke and actually uploaded the latest episodes instead :D
Shouldn't the more pressing worry is that all of these megathreats are happening at around the same time as a chapter 7? So even if you somehow avoided 1 or 2, the others would still be devastating?
Nationalize banking and energy.
@@Monkehrawrrr terrible idea
@@HH-le1vi great idea
@@reggie69. depends on the nation & level of corruption
The mega threats are always looming. Usually, all at once. The beginning of the twentieth century saw several pandemics and two world wars. If you actually read history, the last 70 or so years are exceptionally free from threats.
Peter Zeihan has spoken prolifically on the subject of deglobilization. I recommend listening to him for an interesting and informed perspective.
You can no longer call it "National leaderboard" can you?
If it mattered, he couldn't
In Pokemon logic, the National Dex includes all Pokemon around the Pokemon World, so why not, Planetary Leaderboard is now National Leaderboard hehe.
The Economy of Mars, dead, desolate, no one here, it has GDP growth of 0% at a value of 0. :)
As a Zimbabwean, I’m very excited about your upcoming video on Zimbabwe
Until, you see how bad the situation is but I guess you know that already
I think it's a fantastic idea to put the world up on the leader board. The result is not trivial and there really werde some lessons there.
Wow EE 🎉 getting to interview Dr. Roubini is amazing! Congrats on the channel’s growth! (everyone remember that growth takes shape in various creative ways, like this!)
I love all your videos but I think this has to be my favourite one to date. Not many people know the economic complexity of globalization and I think this video does a phenomenal job at explaining it (or at least the basics).
Absolute love it, thank you!
EE’s team effort really shows in the quality of recent videos
Peter Zeihan’s recent book “The End of the World is Just the Beginning” (2022) was extremely amazing in this area/subject. He has quite a few interviews on RUclips that are only about an hour long that really give all of this context. The book, though, is really good.
Or the bird Phoenix.
LmO😂you belive cia's Statement
ECONOMICS (MMT): The only field of study where the equations and formula are designed to conceal facts, not reveal them.
What this says is that much of the global prosperity we have experienced over the past few years has all been a bit of a mirage.
Its nice to see an Economist having "fun" :)
Well they do get paid extravagant amounts for giving their opinions & talking BS.
As an American myself I can honestly say that I’ve been aware of other countries my whole life.
Sure, same here.
But it's good to laugh at ourselves.
Alaska and Ohio aren't different countries, just to clarify.
I’ve been slightly* aware. Like a far off dream, or a myth
America has accumulated debts and pledges that it cannot pay. This problem has developed over several decades under both Republican and Democrat administrations. It is a fundamental failing of liberal democracy. People keep voting for more government and more government handouts until the economy collapses.
Good to know man
Regarding Australia exporting raw materials instead of processing some portion of the end product. I would love to see an episode regarding the economics of importing low wage (guest) workers to carry out the manual labor jobs the local labor force is too high priced/too scarce to complete. The examples which come to mind are the labor required to complete the stadiums for the World Cup or migrant farm labor. Thanks
im a canadian and we have essentially the same problem. Droves of people from the global south spend their summers here picking crops and doing other labour jobs.
The resource economy doesnt keep going without a way to harvest the resources.
The problem with importing workers is that the local minimum wage and safety laws still apply. By sending the raw materials to another country, companies can get away with paying workers less than legally permitted at home, as well as often not having to spend as much on keeping workers safe. So importing workers would cost almost the same as hiring locals.
As for resources like crops, the same thing with migrant workers happens in Australia. But the only reason they hire them is because they can't ship the fruit trees overseas to get them picked there. You do see it with things like fishing though. A lot of the frozen seafood for sale in Australia has written on the packaging "Caught in New Zealand, processed in China".
@@Berkeloid0 The Problem?
@@Edge81 The problem with Erik's idea, he said a company could save money by importing cheap workers, I said that won't save you any money because you have to treat them the same as the locals. Great for workers, no benefit for companies looking to save a few bucks.
@@Berkeloid0 Imo local safety rules and wages should apply. The last thing we want is an increase in local unemployment and a spiral of downward wages and poor working conditions.
I'm pretty understanding of most of these points. In regards to the globalization argument I struggle with huge chunks of this. Mostly cheap energy has gotten us here but as transportation costs go up this argument loses ground. Also, being from Canada we have some enormous mineral/natural resource corporations. I know how our higher dollar and stronger economy has given us enormous control in South America and us mining THEIR resources has made us extremely wealthy but does not work in favour for the average south american. This is especially true of the USA (who we likely learned it from)
Litterally been talking about all of this in half the papers i'm currently in at uni... great timing as per usual
Just curious, that $12,234 per capita number, when adjusted for inflation and increased costs of living, how much has per capita buying power actually improved?
Good question, the GDP per capita ppp globally increased from 11,000 in 2000 to 17,000 in 2021. According to Worldbank. So it's not twice as much, but it's a 50% increase in 20 years so that's amazing
I'm curious what the median changes were.
@@adamritton5820 Median GDP PPP per capita measured how? By country? By individual? Either would be a simple "list and find out" check away. The numbers are all public.
@@adamritton5820 Because it was so easy, I did it for you. IMF's Median (by country) for 2000 was $5893, while it was $15,556 in 2021.
By individual would be more "median", but since China was far below median in 2000 and far above it in 2021, that growth would probably be even more staggering.
Politicians always care about short term and blame opposition
That's the democratic election cycle of 4-5 years on average. China doesn't have that problem as there are no election so they can plan 30 years in advance etc.
Politicians care about being elected. The people who elect them care about short term.
The problem with the long term solutions offered in this video is the same issue politicians face. Even if you wanted to promote sound long term solutions it doesn't do you any good if you can't get elected and get into a position of power to start with. I am not defending politicians because most of them are very selfish with their motives, but you can't blame them when you are the one that is voting them into power.
In a factious system you may have to stop voting for your most likely to be elected candidate to the candidate you actually believe will make the changes that are wise in the long term.
Those in China need to apply.
@@snowflakemelter7171 Which explains why they tanked their demographics with the One-Child Policy and tanked their economy with zero-COVID. Also the same country that is building even more coal power plants and painting mountains green to promote the facade of environmentalism...
Completely agree with the megatrends. I would add the fact that the excessive opportunism and short vision in the technology industry has developed a worrying state in which people's privacy is being massively violated for profit. There's no future without privacy.
Globalisation has been an unmitigated disaster for the American working class. In 1970 a factory worker or mechanic could support a family with a single income. Today, with two or even three paychecks, it's a struggle.
It's more than that. When women entered the workforce in droves labor got way cheaper because supply was higher than demand.
Back in 1970 many families were single income.
Now many families are dual income.
This means there is more money chasing around products for the same number of people (or fewer, as families shrink).
As the other poster pointed out, there is also more people chasing jobs so the labour market responds by wages growing more slowly.
@@HH-le1vi entered in droves? It took decades to hit 50% participation for women in the workforce and most jobs were menial low paying jobs. You just want to blame women.
@@patrickbateman1660 women didn't go to work much until WW2. Its just how things were. And I'm not blaming them but you'd have to be ignorant to not realize that people seeing 2 incomes in a household means they can afford more house and thusly prices go way up to account for it
Indeed. Time to ask WHO is benefiting from this. The Oligarchs?
I live in an advanced western economy. Your assessment of a "golden age of economic prosperity" just looks at raw numbers on spreadsheets and is entirely divorced from reality. My city has an ever-increasing number of pensioners and retirees living in their vehicles, and at 40 years old I have had to find a roommate to make ends meet. At the end of the month, it is common to have to choose between the food bank or going hungry. I have a good job and make above the median wage for my area. Give your head a shake.
Nice chart at 3:34 but are these based on resources or reserves? For mined commodities, e.g. copper, iron ore, gold, uranium, the resource is the estimate of the entire deposit; the reserve is the subset of the resource that is estimated to be economically viable at current prices for the commodity. This is an important distinction as each option would deliver wildly different results, and it's not clear from your graph which of the two it is.
While your ranking system does include "stability" but you don't explicitly use a dollar amount for that ranking. One reason for the end of globalization is the realization that there's a social and economic cost (risk) of not being self-sufficient, and real costs associated with the security concerns involved. But gov't spending on security is (at least here in the US) an industry in and of itself. The irony potentially being that we use Chinese investment dollars in US bonds to fund our security apparatus to keep the Chinese security threat in check!
Thanks for the awesome content and great videos!!!
I always wonder what the point of replacing everyone with machines might be. I mean if nobody earns anything anymore, what's the point of having an economy at all? Who's going to be buying anything? How will everyone eat? Am I missing something?
Great video mate, entertaining and informative. You'd be 8.4 on the global leader board...👍
^^^ I freaking love how the spam bots have instantly come back the moment they reverted the "@" tags from usernames. Thanks youtube engineers
Functionally, this year my wage was worth less than it was last year. This has been going on for a while. The size of the pie might have grown but I am getting less of it every year... and that is by design, not accident. De-globalisation will give me more power and corportions less power... I am all for it.
Exactly. Doubling global GDP has done nothing for the masses, many of which are worse off.
It'll also mean you'll have to spend 5x as much on food to start with
@@flakgun153 Yep, because the food most people consume certainly doesn't come from within the same country, let alone state. Coffee and chocolate are the easiest examples; how much coffee and chocolate is consumed daily in NYC vs produced in NY state (or even the entire USA)? And that's only one city and 2 food types. Expand that out amongst all foods and cities, then expand it out to other goods. Live in a country that doesn't produce cars? Have fun walking! Imagine how well that'd go down...
@@andrewcole9824 it has done a lot for the masses. You mean the masses of the most advanced economies, those are the only group that have reduced their wealth.
@codybagelstein2235 That also means 130 countries without emergency services vehicles.
Have fun waiting for the horse and watercart when your house is on fire if you live in one of the 130.
The older you get, the more you realize that almost nobody knows anything. Everything 'works' purely by luck.
Exactly we are in an continuos crisis basicly with diffrent intensity levels .
Yup and it's scary af
My perception of the world is similar to the Billy Joel song “we didn’t start the fire.“ my perception is that the world has always in someway been on fire. There are only a few firefighters who can put out the fire, but there is more fire than fire fighter.
Luck is always a part of every success 🙌 outcome. 😶
Dues vult!
Living my emergency funds now,
Hope things will get better quickly
😅
This was way more optimistic than the thumbnail would suggest.
Can you do an updated video on automation and if technology can become advanced enough to replace humans, meaning artificial labor? One of your first videos ever was on this topic, "The Economics of our Machine Future". But that was several years ago. With new technology released recently like ChatGPT, and actual humanoid robots powered by Artificial Intelligence being actively worked on by several companies, the time is great for an updated video.
Up
American peoples is suffering, starving and struggling now, but the US government is worried about the Ukrainian government and peoples.
I always wonder how can the typical family with average income afford a higher rate+ more expensive home? in my area multi generational home is becoming the norm . Don’t forget to add the inflation which just this week was 9.1 on the CPI , producers index 11.3, it’s going to be a rough ride for sure
I'm sure the idea of a coach might sound generic or controversial to a few, but new study by investopedia found that demand for portfolio-coaches sky-rocketed by over 41.8% since the pandemic and based on firsthand encounter, I can say for certain their skillsets are topnotch, I've raised over $500k from an initially stagnant reserve of $150K all within 14months
@@selenajack2036 that's impressive!, I could really use the expertise of this advisors , my portfolio has been down bad....who’s the person guiding you
@@evitasmith6218 Credits to 'Eleanor Annette Eckhaus' she has a web presence, so you can simply just search her.
Found her, I wrote her an email and scheduled a call, hopefully she responds, I plan to start 2023 on a woodnote financially.
The problem with "comparative advantage" globalism is that is assumes a fair and orderly world, which you can't have without a unilateral hegemony (though perhaps you could with a decentralized blockchain-directed anarchy... maybe).
You can't have unilateral hegemony in a world with multiple competing power centers working from adversarial ideological positions.
This is not hard to understand.
I think this IS hard for most to understamd.
@@QuatMan "Democracy is government by the people... and the people are retarded."
What’s missing from this video: How using averages is misleading without showing a distribution curve; how politics drives many of the world’s economic problems such that many economic solutions are rendered worthless; talking about wages and how wage growth has been stagnating as GDP rises; and tied to the previous issue… income inequality is driving much of the push against globalization. It would also be nice if there was talk about how economically inefficient military spending is and how it reduces economic activity unless there is a war… aka killing people en masse.
EE could you make a video on short-termism of companies and how it varies according to different countries/legislations? Is there economic research that suggests how to solve it?
Persistent, systemic shortages were one of the first obvious signs of the coming collapse in Asimov's Foundation.
Let's lay the foundation for the Foundations then
Yes, NR has forgotten more about economics than I will ever know. However, as a matter of fact, the UK is not in recession and is not expected to enter into one in 2023. The same cannot be said of Germany.
Britain’s current economic challenges are not unique and at this point in time can’t be blamed on Brexit. While it’s inflation is high it is also on a similar level to most developed countries.
It might be different in five years time when most of the problems caused by locking down the world’s economy are resolved.
Love it! Thank you for calling out my fellow, albeit mostly clueless, Americans. It's true that we tend to forget about the rest of the world. It's not completely our fault, however, as our economy, geographic size, geographic location, population, immigration, etc., are so much larger than so many other Western countries. Oh, and those (entire) oceans on either side of us, our southern and northern neighbors, all add to that objectively very real separation. Europeans can start out in London and drive a personal vehicle, passing through entirely different countries in a single day; yet, if I were to drive the same number of kilometers from around here in western Virginia heading west, I would still be deep within the US. However, that does not excuse us from our collective failure to more actively seek out the rest of the planet's different perspectives; and, more importantly, make an honest effort to keep them in mind. But, that really only works both ways.
9:50
This value of this aspect of having debt is impossible to understate, and in every situation, this value is almost nothing compared to having a smaller debt burden.
Dr. Roubini should acknowledge that there's more to human relations than just the economic aspect.
I wonder what EE's take is on the collapse of SVB and whether it will have a 2008-esque impact on the global economy.
Silvergate
Silicone valley
All controlled collapse to push for digit currency.
All about mass control in the name of "climate crisis"
I think that, like a previous EE video mentioned, no two crises are the same; so I don't think the collapse of SVB will have an impact similar to anything before it.
But it'll certainly be significant, specially once the western wave it produced hits the eastern one of China's collapsed real estate market and ensuing bank runs that they've had since late 2022. I think SVB will probably lay wreck to the US tech startup market, and uncertainty regarding runner-up China leading many VCs to seek refuge in emerging economies like India and Latin America (whose corps generally have much, much lower P/E ratios) or, for more conservative investors, Estonia and Israel, at the detriment of existing tech hubs in SF, NYC and Seattle.
Still, it's usually hard to predict the future as it is, but with the emerging AI revolution, it'd take only a single killer app to change the global market irreparably. Didn't SF become the tech capital of the world just because one of Intel's founders set up shop there to be closer to his mom, I think?
Not even close. Lehman Brothers was 3x bigger when it collapsed and triggered the GFC. Ironically enough, one of the heads of SVB was also one of the heads of Lehman Brothers and they both made terrible decisions that caused the collapse of each of them.
@@HH-le1vialso you have to take inflation since 2008 into account and then SVB is not even 1/5th of the size.
@@johanstjern4118 yeah I didn't even consider inflation. Just raw numbers it's not even close to Lehman Brothers
I like your videos, they're informative and entertaining. A request: can you put a place name with the images? Especially in this video where you show imagery from all over the world, I'd love to see where it's from.
A major facet of globalization is unequal exchange, its blatantly obvious even in the simplified technology export examples you gave. Globalization did increase wealth overall, but unequal exchange ensured that its distribution was heavily skewed to those who were already rich (both the billionaire class and the western aligned).
Oh companies did a whole LOT more than "pass on the costs to their consumers", in fact, they RAISED their profit MARGINS by 300% in a year. That provided about half the cost increases to consumer found in "Inflation"....
Another Brilliant video on Economics Explained ... thank you so much for producing such great content!
Incredible video and learned so much. Understanding these broader concepts is really important - the modern world is incredibly complicated, and ripple effects have many unexpected consequences. To be clear - I don’t understand any of it 😂 but I’m so excited to listen people who do understand discuss it and lay it out so clearly for the uninitiated. Economists seem to have some sort of sacred knowledge in the modern era
The world is so interconnected now that any issue with any country will caused a significant ripple effect to the world economy. Conflicts are getting even more dangerous
Which conflicts?
Generally whichever conflicts if not dealt properly will cause serious issue. Like Ukraine war caused food security issue. Any escalation might result in nuclear weapons used. Taiwan conflict if not dealt properly will probably cripple the whole world economy
Yes, these conflicts are known to cause shocks in the stock market. In some industries like oil, it has played out in their favor, the rising oil prices increases the share value of those firms. While in other sectors, such as semiconductor manufacturing in Taiwan, the share value of that sector has fallen due to the risk of a Chinese invasion.
Yes. We need to pay attention to these issues.
Another superb creation. Thank you.
Would love to hear your thoughts (perhaps a topic for video?) on the topic of What is the cost burden on developing economies that do not follow basic principles like lane driving. How it could result in inflation as a result of second and third order consequences. How it could result in low productivity due to increased time spent in commuting. How economies could lose their valuable productivity contributors (youth) due to increased deaths on the road, and so on...
Once again, thank you for creating so much valuable content and would look forward to more content.
Tie it in to the changes wrought by remote work/lesser commuting aaaaannnd the new push by employers to force workers back to the office. You'll get a neat little bow at the end.
@Done Deal, good idea 💡
Hello EE team! I absolutely loved this video, but what I would love even more is for you to make a video about my country - Bulgaria. There's a lot to be covered in regards to such a small country, however, I would like to see such a video surface on your channel.
Still waiting for that to happen! And Ive been a subscriber for years.
just sitting here waiting for ee video to drop so I can finally do hw
The statement that "just in time" is the best way is just entirely unfactual and I feel like half the rest of your video proves this
Hi I love your videos. Could
you do a video on Zimbabwe’s economics think it will be an interesting video. Much love from Zimbabwe
Vid series idea, an overview of the transition from one global reserve currency to another. How/why did currency A collapse? What made currency B the attractive option amongst its competitors? How long and hard was the transition from the 'losing' currency to the 'winning' currency; split across modern notions of lower/middle/upper class income brackets? Are there any parallels to the modern global economy and historical economics based on global social saturation of the period specific reserve currency?
m.ruclips.net/video/xguam0TKMw8/видео.html
As a viewer from the United States, I am shocked to only today find out that there are other countries out there beyond my own
I have seen Americans not knowing what capitals or countries are.
BRICS seeks to create a new currency, considering gold's historical role as a store of value and medium of exchange. However, the functionality and acceptance of a gold-backed currency in the current global financial system are uncertain. Creating a new currency requires careful consideration of economic, political, and logistical factors.
The discussions and proposals surrounding BRICS nations' potential use of gold are intriguing. People choose to buy gold for various reasons, such as its historical role as a store of value and medium of exchange, its potential as a hedge against inflation or currency devaluation, and its relative scarcity compared to other commodities. Gold also offers diversification benefits to investment portfolios due to its low correlation with stocks and bonds.
I find gold investment reliable and aim to buy more to recover losses. Silver is also a good investment but differs from my collectibles. Clear investment goals and education are crucial. I work with Margaret Johnson Arndt a SEC-regulated financial consultant. Starting with modest investments, I accumulated nearly $799k over time.
We laugh at that Krugman quote, but I think we've really undersold how useful the fax machine was when it came out in the 1800s.
The Japanese didn't though!
Always interesting, thank you.
I thought investors were to help grow businesses - not milk them like a cow. It’s a perpetual growth. Companies reach level of success but are expected to continue expanding their profits. What if we put a cap on capitalism… what if we got investors out of corporations after corporations reach a reasonable plateau?
Investors *are* the corporation though (if it is publicly traded).
That makes no sense. A company needs incentive to grow. Those investments give them resources to grow. If you get rid of investment you'd have a worse version of today where the massive companies control everything cause they're the only ones who can afford to do anything.
@@HH-le1vi so Starbucks, McDonald’s and Coca Cola need to grow even more?
@@Shanes_Lanes what's bad about it if they do? What negative impact does it have?
@@HH-le1vi They effectively become monopolies, preventing competition. How many small businesses shut down because they couldn't compete with Amazon?
One major omission in the list of big issues: financialisation. In the past companies made profits, gave their workers a raise, invested in the company and then paid shareholders. Now companies use profits to buy their own shares and reward senior managers with shares and produce healthy dividends for shareholders. Employees get crumbs. The rich devote their time to avoiding tax on their wealth while wage owners cannot escape taxes. The divisions between rich and poor are headed in the direction of the nineteenth century with a new servant class- not in the sense of living in but providing the goods and especially services for the wealthy. They provide security, specialized tourism, pet care, education, financial, health, gardening etc services. Meantime, incomes of the majority are stagnating or declining and public services get ever worse. So the missing element on the list is the model of capitalism itself- it increasingly fails the majority
That's why a decreasing population is a good thing for the workers. Hard to keep underpayed employees in a labor shortage.
Hi EE Team - love this video. Can you please provide source links for studies mentioned in the video? I am particularly interested in the WB / IMF study mentioned by Dr Roubini (identifying 80 countries facing debt burden headwinds), but could only find WB blogs on the subject. Thank you!
The debacle with the ship blocking the entire Suez Canal goes to show how JIT is very fragile and can't be relied upon long term. In factory warehouse a single loose screw in a wrong place can stop the entire system for hours. Now stretch that to a global scale with billions of different types of possible loose screws in the system, that can block the entire global-scale system for weeks. Like with everything in life, moderation is key and systems should be a mix of both JIT and multiple JIC fail safe systems on top if anything goes wrong. Because more there are variables, more guaranteed it is that something WILL go wrong.
The global economy is like a drug addict chasing their highs. Constantly chasing unattainable highs until a massive comedown each being worse than the last.
3:36
Because of the amount of money it takes to actually live. Especially regarding housing.
There's a reason why economic growth was large during the Pioneering Days.
Because people weren't bogged down by rent. And just went right to mining or cattle ranching.
Love your videos from Bangladesh.
Wish he did a video on Bangladesh
I cannot ignore the strangely funny way of speech ending every sentence with a question like tone up
Globalization benefits: things are global
Globalization deficiencies: things are global
4:14 comparative advantage is a euphemism for labor price arbitrage.
9:33 someone's debt is someone else's asset. In other words global debt is just another indicator for wealth inequality
18:38 capital is just someone's profitable plan for labor
A decrease in globalisation means a spreading of "risk" across countries, improves diversity of equipment, upskills a workplace to perform more tasks allowing for adaptability to changes in production
Just in time is a classic example of efficiency versus risk ratio. It works wonderfully ... until it doesn't. So YBGIBG (You'll be gone, I'll be gone) economics favors supply side economics while impacting demand side economics. Thank you Milton Friedman.
I'd like to know if _Just-in-Case_ manufacturing is better or worse for a country's income inequality. Both in general and considering rising prices.
(Yeah, that last piece depends on the kinds of goods a country produces, so while growing more food at home _might_ be better for ordinary people [typical workers and consumers] but if the economy is based on luxury megayachts then I guess that could end up sucking for the locals regardless of its effect on wages.)
Multiple people in the comments have said it already but Economics truly can make a person depressed
I was joking about him putting the world economy on the leaderboard, but then he actually did it
Prepare for the worst, hope for the best is a mantra for more than just economists but it certainly works
I actually agree with globalization to an extent. I live in the US and I agree with importing some things. Other things I think we should make internally. The more high tech I think it should be kept in house and anything that is high value low resource input.
Yeah, things like chip production are a matter of national security. We should have never exported the production of that.
@@kyle857 well it is a matter of national security for everyone so should everyone do everything themselves? Countries specializing in specfiic products and services is probably great in times of peace and might even maintain peace between nations if we rely on other nations then we are less likely to go to war I think.
@@glens18account Tell that to the Europeans once dependent on Russian gas. Interdependency can be used as a whole lot leverage if one side is willing to go “all in” while the other is trying to maintain the status quo.
@Tom Blaise yes we trusted on the peace by mutual dependency it should bring. I just couldn't imagine Putin being this irrational. Actions before the war in Ukraine where often evil but at least made strategic sense for Russia. This war hasn't....
@@dekippiesip Russia is coming off much worse from not selling it's fuel than by any european country not having access to it. After this war, Russia is going to be in a really seriously bad economic state, maybe in a year from now.
Couple of questions:
Does globalization's attractiveness end when poorer manufacturing countries raise their living standards to a certain level? i.e. cost competitiveness goes away
Does the end of the petrol dollar start a downward spiral for US currency/economy? How would that look like?
What would happen if stock buyback is banned? What would happen to the stock markets? 401k? Contagion impacts?
1. Instead of thinking in terms of countries, lets think locally in terms of states in your country or even cities. Lets say your town has a tire factory, it is very unlikely that the next town is going to build a tire factory. It is easy to just get tires from the next town. Building factories is expensive. So, even if poor countries get richer as China is getting right now and demand a similar wage as an US factory worker, building new factories instead of just shipping is still a huge investment and risk and very often not worth it.
2. This is something I have been thinking for a while too. End of petrodollar would definitely decrease the valuation of US dollar but people are reluctant to change and countries would most likely keep using US dollar as reserve currency unless they are given a very strong reason not to do so.
3. Even if it could be banned, it is not very clear how much it will help. The most likely case is that larger corporations will just do some offshore tax haven trickery to bypass the laws.
I'd love to see you make a vid on the decline of globalization. Integrate Peter Zeihan's case, which is very compelling
I like the shout outs to Justin Time. He's a good guy.
I think another thing to consider is the hoarding of wealth by those at the top while those at the bottom are earning less and less.
No such thing as hoarding wealth. It’s all invested, even if it’s sitting in bank vaults. And YOU gave those at the top their money.
Nice video as usual, can you please do more videos about African countries like South Africa, Botswana, Nigeria and Kenya.
History does tell us that technology is NOT a replacement for labor, but a supplement for production efficiency.
History also tells us that while it did not completely replace labour, it did get rid of several jobs.
The problem with that is that history tells us a lot of things that are true...right up until they aren't anymore.
History demonstrates that major economic activity requires a coastline or a navigable river...until the railroad came along.
History demonstrates that an agricultural-society based army will always lose to a pastoralist or hunter-gatherer army of equal size...until the invention of firearms.
History demonstrates that a majority of economic activity will always be devoted to keeping people fed...until the Industrial Revolution.
History demonstrates that (discounting migration) a population will always grow, in the absence of something (war, famine, plague, etc.) actively killing people...until the late 20th/early 21st century, when basically every advanced economy slipped below replacement.
The "rules" of history cannot be blindly followed, they must be analyzed, to understand what factors make them rules, so we can recognize when those factors change.
@@hegedusmark8212 so what? The end result i progress which usually comes with growing pains
This was a really good episode