Welcome we will be reviewing macro events from this past week from The Post I made at the beginning of this week on 7/25/22.
I have added a Definitions page which will include all of the terms and abbreviations that I use from now on and will be referred to on every post.
Substack has launched an iOS app for those of you using apple devices. I am an android peasant and can’t tell you if its good or not, but check it out if you have an iPhone or some other such trappings of royalty.
Please feel free to skip around or ignore certain sections if it does not apply to you. The Table of Contents is made to preserve your time in this manner. You can always simply read the conclusion if you are in a hurry.
Table of Contents
Beyond Boom & Bust
Bank of Japan Meeting Minutes (lol)
US Interest Rates
Bloomberg and an Inverted Yield Curve
The Decision
The Press Conference
US GDP
Crypto Macro
Bitcoin Price Action
Overall Crypto Macro
Conclusion
Bonus
1. Beyond Boom & Bust
Nietzsche once wrote a book called Beyond Good and Evil. Most people read the first few chapters (at best), then give up and put it down. It’s a very dense book even though the paperback might seem very thin. Because people never finish the book they often come to the exact opposite conclusions of what Nietzsche (I think) intended. In the book he defines two opposing moralities striving for the attention of the public. One is called Master Morality, it focuses on itself and why it is good/better than other people. The other is called Slave morality, and it focuses on others and why others are bad/worse than it is. The slave watches the master and invents reasons why the slave is not nearly as bad as the master. It is a morality of judgement and Ressentiment. The master simply looks at himself and invents reasons why he is better than other people.
The master can said to be an evolution of the slave, but not necessarily any better when viewed objectively. You could say that a slave morality in charge of a justice system would punish criminals based on the consequences of their actions, while a master morality would take more interest in the motivations behind the action. If you look closely you can already see the failing of Master Morality, how many times have we seen people with good intentions do pure evil out of their own ignorance?
Nietzsche outlines both of these traditional moralities that people can hold and explains the consequences associated with these moralities.
Depending on where people quit trying to understand the book when they read it, will more or less determine what their opinion of Nietzsche is. If you never read it at all, you may have some snappy quotes in your head about life being the will to power. If you internalize these quotes and take them at face value, you are actually close to understanding the book. Those quotes help you to avoid a key mistake if taken at face value. That mistake is shrinking back from embracing your life and the natural competition and the outcomes of there being winners and losers. This cannot be avoided, to be alive is to attempt to exert power on those around you. Of course, if you do not take it at face value and instead try to interpret it as good or bad, through your morality, you will twist it and fulfill Nietzsche’s expectation of how western society interprets life itself.
If you quit the book early, you might think he was making appeal for people to focus on themselves and embody master morality to make themselves Good/better than other people. If you quit midway through the book, you might think he was making an appeal for nihilism and for our internal morality to not matter, or even for slave morality to be superior due to it’s pro-social outcomes. You may have even come to the conclusion that Nietzsche was promoting atheism in some of his criticisms of the evolution of religion. Truthfully, I believe that Nietzsche was arguing that atheism was an inevitable further evolution of religion if human nature drove our decision making. Religion calls for us to fast, abstain from sex or pleasure and to do without things we may need in order to purify our spirits. In this light, an atheist can be said to be engaging in the highest form of Christian Master Morality through religion by abstaining from God directly. This is the highest form of religious fasting that is possible.
If you finished the book, you may find yourself wondering what it is Nietzsche thinks that we should be doing. What sort of morality are we supposed to be holding? Should we pursue the good within us, or avoid the bad from without? Rather than explicitly telling us, Nietzsche simply makes predictions about what we will do in the coming century. His predictions were for determinism to dominate western social morality. For free will as a concept to fall out of the common lexicon and instead for us to believe we have innate characteristics based on whichever social groups win the fight that some now might call the “culture war.”
Nietzsche never quite describes what you are supposed to think. Instead, I believe the entire book is written in the manner in which we are “supposed” to think. I believe that the main takeaway was for us to observe nature and to observe that which is necessary for life and to not oppose that which is necessary. For instance, it is an inescapable part of human nature for us to lie. We lie to friends, family, coworkers, hell… we even tell lies to ourselves when we are alone. Have you ever had an unfortunate thing happen to you and then just made up a story in your head about what happened that had nothing to do with reality? Someone rear-ends you on the drive home from work and before an hour has even passed you already have a story in your head about how “you knew, you should have taken the toll road back home.” The sensible among you will keep that story to yourself, while those more in touch with your own personal mythology may tell that story to others.
You knew nothing, how could you? You can’t see the future, yet our default nature includes everyday untruths mixed in with truths.
Slave morality might see this as a bad action to be avoided because “x group always lies.” Master morality might see themselves as good when they choose not to lie.
The truth is that you are a human, you’re going to lie unconsciously, and thats okay. The real mistake is our application of the concepts of good and evil to the natural parts of life and our attempts to either avoid or amplify these things. We must be careful not to cause larger problems, especially not problems that we cannot deal with, in an attempt to avoid small problems that we can deal with. You should not attempt to escape your human nature, because there is nothing wrong with you. Have fun indulging in your own personal mythology. Go ahead and tell people that the only reason your credit limit on your card got increased was because you put in the electronic request for it on a Tuesday, and Tuesday is your lucky day. The most human lies we tell are the ones that can’t quite totally be proven or disproven. To indulge in those lies is to commune with the divine, just be careful to be aware that your personal mythology does not stray into the realm of objective truth. I see no way that Nietzsche’s work could be interpreted as supporting lies about objective truth. Down that path lies hell itself. Develop your own personal mythology, but tell no objective falsehoods.
So what does that have to do with this week?
In the US this week, we have the Master Morality and the Slave Morality arguing about whether or not the US is in a recession yet. A recession is a made-up term. It exists so long as everyone agrees it exists. If we lived in a culture that had not made-up the word, we would not even know to argue about whether it was happening.
Consider culture as akin to language. In certain languages, where there exists no word for something, anyone who speaks only that language cannot interpret what they are experiencing if they lack a word for it.
And yet here we are, spending a week squabbling over a word we invented while ignoring the bigger picture. No doubt both the Master’s and the Slave’s are scheming up new ways to further stretch reality towards the good, or away from the evil that we ourselves have invented through language.
Everything else is just smoke and ghosts for the public to be distracted by so they can rail against and argue about whatever their pet belief is. Unfortunately, everything is political. When someone tries to tell you why we are or aren’t in a recession, just smile, nod, and agree with whatever they say… it does not matter anymore.
We are Beyond Boom & Bust. It does not matter what label we wish to apply to the current state of macro-economics in the west. Our labels and philosophizing about whether we’re in a recession or not will lead us only further astray in the terms of how western sovereign finances will further develop. Nietzsche predicted a degradation of human philosophy as a result of our desire to ascribe Good/Bad to every natural event in the world around us. I too predict a degradation of western finances as a result of economists trying to ascribe good/bad to the economy. The macro is what it is at any given point in time. We here, can (and do) predict where prices, assets, hiring, real estate, and shortages will occur based on what we see in front of us. The stories and lies that we make up to describe the economy in any given moment are both natural events not to be avoided nor amplified. We should engage in the discussion (we are only human after all), while also staying focused on the higher objective truth.
As Nietzschean Traders, the only thing we concern ourselves with is “Number go up? Or Number go down?” Every meaningful question and answer ever asked in economics boils down to these two questions. Our prescription of morality onto economics has always been and will be our downfall. I can’t stop that. You can’t stop that. We can’t stop that. But what we can do is prepare for the coming future and choose the best assortment of possible outcomes to make number go up. If number go up, our ability to exercise our power increases, and the likelihood of us ending up on the side of society that Ted Kaczynski describes decreases. Stay tuned, I’m sure at a later date I will find a way to write an installment of Unibomber Economics.
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