All-In-Podcast

The Great Inflation Debate, Amazon Gets Spicy on Twitter, Rethinking Supply Chains & More (E27) | All-In with Chamath, Jason, Sacks & Friedberg

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Key Takeaways

  • The big question on everyone’s mind: Will there be inflation? 
    • Answer: Yes, but there won’t be hyperinflation
      • The government has printed trillions of dollars
      • Artificial levels of consumption have been created
      • Overconsumption may drive up commodity prices which may end up leading to inflation
        • “I do think it will drive inflation. I do think it will drive commodity prices.” – Chamath
  • Although Chamath believes there will be inflation, he doesn’t believe there will be hyperinflation because modern-day technology can reduce prices before it happens
  • The Suez Canal was blocked by a ship that weighed 200,000 metric tons and longer than the Empire State building
    • Why is this a big deal? 10% of global trade moves through the Suez Canal
  • Globalization has made everything cheaper, but outsourcing production has its risks:
    • A recent flood in a nickel mine will cause a nickel shortage and prices to increase globally
    • The US off-shored its pharmaceutical and Personal Protective Equipment (PPE) production so when COVID happened, it lacked the resources and supplies to help people during the pandemic 

Intro

The Great Inflation Debate

  • Every dollar someone earns can be spent in one of two ways: consumption or investment
    • Inflation comes from the gross tonnage of volume or when the vast majority of people can afford to consume regular goods which then increases the price of the product (more demand = higher prices)
  • The big question on everyone’s mind: Will there be inflation? Answer: Yes, but there won’t be hyperinflation
    • The government has printed trillions of dollars
    • Artificial levels of consumption have been created
    • Overconsumption may drive up commodity prices which may end up leading to inflation
      • “I do think it will drive inflation. I do think it will drive commodity prices.” – Chamath
  • Although Chamath believes there will be inflation, he doesn’t believe there will be hyperinflation
    • “I don’t think that it’s even possible to actually have hyperinflation anymore” – Chamath
  • David Friedberg’s take: Anything the government touches will lead to inflation because when there’s only one customer and no competition, you can charge whatever you want

David Sacks’s Powerpoint

  • David calls out Chamath’s tweet about how inflation helped close the inequality gap and shares his Powerpoint to disprove him
  • David’s counterargument:
    • A severe recession began in 1979 which lead to -0.3% GDP growth in 1980
    • The unemployment rate was at 6%
    • Prime rate 30-year mortgage was at 11.2%
    • Long lines at gas pumps
    • Recessions and depressions shrink the inequality gap by making everyone poorer
  • David says that wage growth for the average worker came to a halt in 2001 because the US started to work with China and outsource a lot of middle-class jobs to them
  • David argues that although it’s reported that 13.5% of Americans live in poverty if you take into account government programs and transfer payments, that number shrinks to about 2% 
  • David also says that one economic boom came from Reagan cutting the top marginal income tax from 70% to 50% in 1981 and from Paul Volcker breaking inflation

 Amazon Gets Spicy on Twitter & Content Moderation

  • Amazon executives have started to respond to tweets from government representatives such as Bernie Sanders and Elizabeth Warren for criticizing their company
    • The executives argue that if the government wants companies to pay more taxes or pay employees more, government officials should pass laws to require those changes
  • Mark Zuckerberg and Jack Dorsey recently participated in a congressional hearing to talk about content moderation and freedom of speech
    • Facebook currently has 30,000 content moderators
      • If social media companies are legally required to have content moderators, it will give establish social media companies, like Facebook, a moat because most new media companies can’t afford to hire so sufficient moderators 

Suez Canal Blocked By A Ship & Supply Chain Management

  • The Suez Canal was blocked by a ship that weighed 200,000 metric tons and longer than the Empire State building
    • On a typical day, about 100 massive ships move through the Canal a day
      • Why is this a big deal? 10% of global trade moves through the Suez Canal
        • This highlights the risk of having a global supply chain
  • Globalization has made everything cheaper, but outsourcing production has its risks:
    • A recent flood in a nickel mine will cause a nickel shortage and prices to increase globally
  • The US off-shored its pharmaceutical and Personal Protective Equipment (PPE) production so when COVID happened, it lacked the resources and supplies to help people during the pandemic 

Discord Acquisition

  • Microsoft is in talks to buy Discord for $10 billion
    • Microsoft may have been worried about Salesforce buying Slack and bought Discord as a way to compete with them
  • The SaaS and cloud industry is a multi-billion dollar industry and still growing 40-50% every year 

Additional Notes

  • BitClout is a crypto social media network
  • The US has been doing a much better job vaccinating people than the EU

All-In Podcast : , , , ,
Notes By Alex Wiec

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