#115 | Frankly
Inflation, Deflation, & Simplification: The 8 Things That Influence Prices
Description
In this week’s Frankly, Nate explores how the prices we encounter in our daily lives are influenced by not only how much money is in the system, but also by resource depletion, technology, affordability by ‘the masses,’ and trust within a complex global system.
Prices are deeply intertwined with the biophysical reality that underpins our society, and are affected by major forces that often operate unseen to the average consumer. Other forces – like leverage, complexity, and currency reform – also have longer term repercussions within our monetary system. These have the ability to create both inflationary and deflationary effects on price, amplifying notions of prosperity and fragility within our current social contract. Ecological instability, often treated as peripheral to financial/price analysis, has emerged as another driver of prices, even as extreme weather, biodiversity loss, and breached planetary boundaries will increasingly feed directly into the cost structures of our modern civilization.
Where are the gaps within our existing conceptions of money and prices? What might follow the past few centuries of increasing societal and economic complexity? And how do prices – and societies – change when monetary claims and physical reality begin pulling in opposite directions?
Show Notes & Links to Learn More
Download transcriptThe TGS team puts together these brief references and show notes for the learning and convenience of our listeners. However, most of the points made in episodes hold more nuance than one link can address, and we encourage you to dig deeper into any of these topics and come to your own informed conclusions.
00:00 – Essay version of this Frankly
02:57 – How money is created by banks
03:12 – Money supply
04:43 – Purchasing power of U.S. dollar
05:24 – Shale oil
05:32 – 1800s Butte City copper ore concentration, 20th century copper ore concentration
06:02 – Energy consumption and copper production in Chile
07:09 – TV price comparison
07:42 – AI causing growth in data center demand
08:18 – Claims of AI productivity increase by 1-2% per year
09:16 – K-shaped economy
10:55 – Financial leverage
11:38 – 1998 Long Term Capital Management
12:02 – John Meriwether
12:05 – 2020 crude oil prices drop to -$35 per barrel
12:39 – Japan’s yen carry trade, Japan’s interest rates
13:10 – Japan holdings of U.S. gov bonds
14:40 – Dunkelflaute
16:24 – Currency devaluation in Weimar Germany, Zimbabwe, Argentina
16:42 – Hyperinflation
17:19 – Bretton Woods, Gold Standard
18:17 – “Too big to fail” banks
21:04 – Asian and BRICS countries moving away from U.S. dollar
21:13 – 2025 Japan interest rate spike
21:58 – Delivery backlog on GE natural gas turbine
22:10 – Peak oil
22:39 – AI and scarcity
