Macroeconomics (Over)simplified

There are two important economic factors: money supply and production.

Macroeconomics (Over)simplified
Photo by Carlos Alfonso 

There are two important economic factors: (1) money supply and (2) production.

Money supply = the total amount of a currency. This can be altered by a central bank printing money.

Production = citizens making products and services.

All of the relevant metrics that people use are proxies for these two economic factors. Ex) Employment statistics and GDP are proxies for (metrics that people use to try to estimate) production.

Too much money printing and too much unemployment is bad.

Low money printing and high employment is good.

Interest Rates

Interest rates are manipulated by the central bank.

Low interest rates = people buy riskier assets (growth stocks, crypto). Because the traditionally safe assets will give poor returns.

High interest rates = people buy less risky assets (bonds, value stocks). Because they provide good returns at low risk.