So, the book say economy run in cycles and waves, there are uphills and downhills, but overall thing get better in the long term.
But why? what is the mechanism behinds it? and, does things always get better cycles after cycles? Is it possible that it’s just the uphill part of a bigger cycle?
In: 4
People telling you you can’t understand them are full of shit. We cam understand them.
Human demographics have undulations, this causes cycles. Same with animals. If cow population goes up in a field, grass is eaten too much, becomes more valuable for them. Same with coyotes eating rabbits.
Another factor is cycles of investment in the industry. If we have too much copper, nobody makes new copper mines. Copper mines take a decade to make, so if demand is low, nobody will make new ones until the demand is high again, and they won’t take too many chances because it’s risky and expensive as fuck so the demand has to get high before they make the new mines. This is cyclical. Same with oil or trains or boats. Nobody makes new boats until there hasn’t been enough boats for a while.
Debt is also cyclical, if you are accumulating too much debt at a faster pace than you can pay it off it will start slowing down the economy and eventually you won’t be making ejough to pay it off. So when you default, the debt is released, and you have less debt burden. This is cyclical.
Anyone telling you that these things are too complicated to understand is lying and probably getting rekt in the nasdaq right now.
Latest Answers