此文为How Economy machines works视频的笔记2/3部分。重点解释了债务以及周期的产生。
几点体会：
1. 人们劳动生产率是持续提高的，但短期内不影响经济波动；
2. 除了我们拿在手里，放在银行里的钱是钱，借贷的钱更是经济的主体部分，有借就有还，“借”和“还”影响消费，影响生产，从而导致产生周期；
3. 经济波动是有周期性的， 这周期性根据借贷周期分短期和长期两种，背后的根本原因是人性；
4. 我们无时不刻不处在周期当中，只不过距离太近看不到全景图片（就像天圆地方一样）。
具体笔记：
Credit
The productivity is growing with our accumulated knowledge in the long run but it doesn't fluctuate much.
Debt allows us to consume more/less than we produce, depending on when we acquire/pay it.
Debt is good when it efficiently allocate resources and generate income while it's bad when it finances over sth. tan can't be paid back.
The borrowing cycle
Phase 1: Expansion. Spending fueled by credit increased.
Phase 2: Inflation. When the amount of spending and income grow faster than the production, it will cause inflation.
Phase 3: Recession. Interest rates were raised by central bank to resist the inflation. and this will cause less borrowing, less spending, thus less income. This is the deflation.
Phase 4: New Expansion.When inflation is no longer a problem, central bank will lower interests rates to encourage borrowing and another expansion begin.
Summary:
Spending is constrained only by the willingness of lenders/borrowers to provide/receive credit.
The interests rate affects the availability of credit.
The short term debt cycle is primarily controlled by the central bank.
Short term debt cycle
Time span: 5-8 years.
The debt increased each cycle due to people have an inclination to borrow/spend more instead of paying back.
Long term debt cycle
When debts rise faster than incomes, it creates the long term debt cycle.
Bubble:
Incomes rising, asset values going up, stock market roars;
Borrowing money to buy goods, services and assets;
Despite people becoming more indebted, lenders even more freely extend credit.
Debt burden:
The ratio of debt to income;
As long as incomes increases, the debt burden stays manageable; people will borrow more money to invest;
With rising incomes and assets values, the borrowers remain credit worthy even with lots of debt;
However, it cannot continue forever. At some point, debt repayments start growing faster than incomes;
This forced people to cut back on spending, thus less income, less credit worthy, causing borrowing to go down.
Deleveraging
Cut spending- incomes fall- credit disappears- asset prices drop- bank gets squeezed- the stock market crashes- social tensions rise;
Borrowers can no longer borrow enough money to make their debt repayments, so they are forced to sell assets;
Assets floods the market and spending fall- the value of collateral drops- make borrowers less credit worthy;
The difference with the recession: borrowers debt burdens have gotten too big and can’t be relieved by lowering interest rates.
Lenders realize that debts are too large to be paid back; Borrowers lost their ability to repay and the collateral price dropped; So, they both stop lending and borrowing.
