Economic Cycles - The economy functions like a machine, driven by short-term and long-term debt cycles [4] - Short-term debt cycles, typically lasting 5 to 8 years, are primarily controlled by the central bank through interest rate adjustments [5] - These cycles involve expansion fueled by credit, leading to inflation, followed by contraction (recession) when the central bank raises interest rates [1][2][3] - Long-term debt cycles occur because debts rise faster than incomes over decades, leading to a debt burden [6] - The ratio of debt to income is called the debt burden, which remains manageable as long as incomes rise [7] Debt and Credit - Spending increases are fueled by credit, which can be created instantly [1] - When credit is easily available, there's an economic expansion; when it's not, there's a recession [4] - Rising incomes and asset values help borrowers remain creditworthy for a long time, even with accumulating debt [8] - At some point, debt repayments grow faster than incomes, forcing people to cut back on spending, leading to a reversal of the cycle [9] - Debt burdens become too big, leading to deleveraging, as seen in 2008 in the United States and Europe [10][11] Inflation and Deflation - Inflation occurs when spending and incomes grow faster than the production of goods, causing prices to rise [1] - The central bank raises interest rates to combat inflation [2] - Deflation occurs when people spend less, causing prices to go down, leading to a recession [3] Human Behavior - People have an inclination to borrow and spend more instead of paying back debt, pushing the economy [5] - Lenders freely extend credit because everyone thinks things are going great, focusing on rising incomes and asset values [6] - People borrow huge amounts of money to buy assets as investments, causing their prices to rise even higher, creating a boom and potentially a bubble [8][7]

In a few hours, I'm doing a Reddit ask me anything since I'm at a stage in my life that I want to pass along whatever I have that could be of value to others. Most importantly, principles for dealing with life, work, the changing world order, debt, money, and markets. I expect that we'll talk about those things, but you can ask me anything. So, I hope that I'll see you then. ...

At this part in your life, you physically and mentally change so that you become an independent adult. At least you want to become an independent adult. And so you have to recognize that where in the past maybe your relationship with your parents and relationship with others was more of a you know a pal and their role model and so on that you're making a transition sometimes as the hormones and the physical and the mental changes take place.And along those lines, recognize though that you think you know eve ...

I'm doing a Reddit ask me anything since I'm at a stage in my life that I want to pass along whatever I have that could be of value to others. Most importantly, principles for dealing with life, work, the changing world order, debt, money, and markets. I expect that we'll talk about those things, but you can ask me anything. So, I hope that I'll see you. ...

So you do not rule out goals because you think they are unattainable. That's that's one of your principles. Yeah.So let me clarify that. Until you're on the journey, you don't know enough about it. So when you try to assess, can I be successful or not be successful.It's really only the experiences along the way. I have a a friend of mine who was professor in charge of entrepreneurship at Harvard Business School and he went through five uh thousand uh entrepreneurs. Something like 20 to 25% of them were succ ...

Why don't you go into government. Why have you thought about you being Secretary of Treasury, chairman of the Federal Reserve, run for the Senate or something and solve those problems while you're in government. Have you ever thought of that.Scares the daylights out of me. Uh I I let me say I have the greatest appreciation and respect for those who go into public service and serve in this kind of an environment. I think there's a question of whether uh with the population, it's not just a leadership questio ...

Economic Principles - Productivity growth, driven by innovation and hard work, is the primary driver of rising living standards over time [1] - Credit's impact is more significant in the short term due to its ability to create economic swings, allowing consumption to exceed production temporarily [2] - Borrowing is essentially pulling spending forward, creating a future obligation to spend less than one earns to repay the debt, thus forming a cycle [5][6] Credit and Debt Dynamics - Credit differs from money; money settles transactions immediately, while credit creates an asset and a liability, representing a promise to pay in the future [7] - The total amount of credit in the United States is approximately $50 trillion, significantly exceeding the total amount of money, which is about $3 trillion [8] - Credit is beneficial when it finances productive investments that generate income to repay the debt, but detrimental when it funds overconsumption that cannot be sustained [10] Economic Cycles - Economic swings are primarily influenced by the availability of credit, not by fluctuations in innovation or hard work [4] - Borrowing sets in motion a predictable series of events, making understanding credit crucial for anticipating future economic outcomes [6] - An economy with credit experiences increased spending and faster income growth than productivity in the short run, but this is unsustainable in the long run [9] Example of Credit Amplification - An individual earning $100,000 annually can borrow $10,000, enabling them to spend $110,000, which in turn becomes another person's income [11][12]

How the economic machine works in 30 minutes. The economy works like a simple machine, but many people don't understand it or they don't agree on how it works. And this has led to a lot of needless economic suffering.I feel a deep sense of responsibility to share my simple but practical economic template. Though it's unconventional, it has helped me to anticipate and to sidestep the global financial crisis and it has worked well for me for over 30 years. Let's begin.Though the economy might seem complex, it ...

Soft Skills Importance - Emphasizes the significance of soft skills, particularly empathy and caring, in supporting individuals during difficult times [1] - Highlights the power of love and kindness in helping others navigate challenging experiences [2] - Underscores that soft skills are valuable assets [2] Personal Experience - Shares a personal experience of loss and the impact of others' kindness [2] - Acknowledges the profound difference made by supportive gestures during times of grief [2]

difficulties and failures are great teachers. One principle that I've really learned is pain plus reflection equals progress. I've learned that there are lessons and and difficulties and failures are great teachers.What painful experiences have you been through that have led to your progress in life. I'd like to tell you about one that really stuck in my mind and changed me in a really beneficial way, but it was painful. 1980 and 81, long time ago, um I had calculated that American banks had lent to foreign ...