BREAKDOWN: Winter Is Coming... Examining the Economy's Eight-Body Problem
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 21 August 2020
⏱️ 23 minutes
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Summary
From the devastation of the service industry to never-ending central bank intervention, these factors make predicting the future of the economy nearly impossible.
This episode is sponsored by Crypto.com, Bitstamp and Nexo.io.
The “three-body problem” is a physics issue that deals with unpredictable futures.
In a recent essay, John Mauldin argues the economy is actually experiencing an “eight-body problem.”
On today’s episode, NLW explores each of those dimensions shaping the challenge we face, including:
- Central bank intervention
- The destruction of the service industry
- The implosion of global trade
In the end, he argues that in a world ruled by chaos, fighting to control the narrative might be the only rational move.
Read Ben Hunt’s essay “The Three-Body Problem.”
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Transcript
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| 0:00.0 | When a company has the ability to persist longer than it can even afford to service its debt, |
| 0:05.6 | what it means is that it keeps talent away from other more productive uses. |
| 0:09.9 | It keeps capital away from other more productive uses. |
| 0:13.2 | The problem with propping up all of these companies that should die because we're scared |
| 0:18.4 | of the jobs that might get destroyed on the other side, is that they're |
| 0:21.8 | sucking up resources that could go to better things. And while there might be short-term pain, |
| 0:27.1 | ultimately those resources are doing nothing for us in the long run. |
| 0:31.9 | Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. |
| 0:41.9 | The breakdown is sponsored by crypto.com, BitStamp, and nexo.io, and produced and distributed by CoinDes. |
| 0:51.3 | What's going on, guys? It is Friday, August 21st, and today we are talking about the economy's |
| 0:58.9 | eight-body problem. Now, we're going to get into exactly what that means to have an eight-body |
| 1:05.3 | problem, but I want to let you know that there's no brief today because this is the type of episode |
| 1:10.5 | where we're going to touch on a huge number of aspects of the economy. |
| 1:14.7 | And so it would cover a lot of what I might touch on in the brief anyway. |
| 1:18.4 | So brief will be back on Monday just like normal. |
| 1:20.8 | But today we're just going to talk about this particular and unique characteristic of the |
| 1:26.0 | current economy. |
| 1:27.7 | To understand the economy's eight body problem, we have to go to the origin or the reference |
| 1:33.4 | point for this term, which is the three-body problem, which is a problem of physics. |
| 1:39.6 | In short, the three-body problem has to do with the impossibility of identifying certain types of |
| 1:46.4 | predictive patterns of phenomenon that are exerting force upon one another. Now, that is a very |
| 1:52.4 | dense statement, so we're going to try to unpack it a little bit, and we're going to start |
... |
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