Podcast Of The Week: It’s All About Bottlenecks

In finance, “macro” people are the ones who operate at the big-picture level. It’s not just stocks and bonds, but they (typically) factor commodities, exchange rates, politics, and all sorts of other things into their analysis.

Sometimes they sound really smart, but aren’t. 

Sometimes they sound really tin-foil hat, and they are. 

And sometimes, if you’re careful who you take macro advice from and discount it as no single person can put all the pieces of the future together in advance, you can learn some new logic to see the future world in. 

In the latter scenario, it can help open your mind up in ways more narrow thinkers can’t do. 

That’s pretty much why I like macro thinkers, and try to do so in a skeptical manner. 

Another good filter to add here is if they have a sense of humor. If a macro person never makes a joke (or shows other signs of genuine humility), tune them out. However, if they can make a joke and demonstrate some amount of self-awareness about the fallibility of their thinking, pay attention. 

All that being said, Kevin Muir is one of my favorite people, and a few weeks ago he had another favorite of mine – Paul Krake – on his podcast. 

This is a long interview, and if you’re not into macro financy stuff, skip it. But if you are, this is worth your time. Krake expands on bottlenecks in supply chains and the financial systems behind them around the world, differentiating between what everyone knows, and what the second-order effects might be. 

For example, if we want more electric vehicles, we don’t just need more copper to build out the electrical grid, but we need a better system for rare earths to be mined, refined, and used in a much bigger battery market. None of this happens overnight, or without long-planned production commitments at multiple levels. I found it really, really interesting to hear him think through, so I’m sharing it here.

What about you? Do you like to think macro? Are there macro thinkers in your industry/professional life you like? Send them my way, I’m fascinated by these “big” thinkers.  

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