Part of Outside Money Resources

This is a video by a Hedge Fund Manager.

He seems to present 3 fundamental components of an Economy as fact:

1 – Productivity Growth

The amount that each person creates in an economy? It seems that that obsession with constant sustained growth is actually one of the main problems with our economy. It helps investors looking for a quick return on investment, but it doesn’t help the workers in an economy as their wages do not increase.

2 – Short Term Debt Cycle

3 – Long Term Debt Cycle

Which are some pretty big suppositions to present as fact.

He says that PRODUCTIVITY GROWTH raises our living standards.  This statement that he presents as fact, seems to not be correct at all. The only people that seem to be benefiting from productivity growth are corporations and hedge fund managers! Right? Wages have gone nowhere in the last 40 years so we, as workers, are not reaping the benefits of productivity growth!

He also says credit allows people to buy stuff they can’t afford “like a house.” What? You can afford to buy a house by taking out a loan, so it’s not something a person cannot afford.?

He also then proposes 3 rules of thumb:

1 – Don’t have debt rise faster than income

Who’s debt? Private Sector debt? Of course. But Gov’t debt doesn’t matter here, but he doesn’t separate it out.

2 – Don’t have income rise faster than productivity

He says this makes you UNCOMPETITIVE. So who’s income are we talking about here? Ahh.. he’s talking about wages, not corporate income. Use Chinese wages and all is good! Right?

3 – Do all that you can to raise your productivity.

WHAT? That means squeezing as much as you can out of each employee? Why is that?

He states that the government can print money and pay people to do stuff (25:16), but then says:

“However, this will LOWER the economy’s total debt burden”

which would be a good thing of course, but he pretends that that is a BAD thing.. and says we are in “difficult times” and we have to find the “RIGHT BALANCE” between reducing spending (austerity), cutting debt, and printing money.

So, I feel that this guy is spending a lot of focus on credit, borrowing, etc.. and seems to brush over the fact that the government can print money and can pay for goods and services, and seems to imply that that is a bad thing as it will lower the private sector’s reliance on debt, which in anyone’s book, would actually be a GOOD thing!

 

Leave a Reply