Posted on 07/08/2024 6:38:53 AM PDT by Kaiser8408a
MMT is mostly magic! The Federal Reserve relies on “The Power of Magic” to fool people. For example, the massive increase in money printing following Covid and Biden’s disastrous economic policies (or FOLLICIES).
Modern monetary theory (MMT) is not convincing to most trained economists of various schools of thought. This causes many to balk at MMT and mock it, some of which is warranted as a reductio ad absurdum, especially given some of MMT’s more outlandish claims. In fact, my own thesis was an Austrian critique of MMT.
But there is also a fair amount of hypocrisy in the non-Austrian (e.g., mainstream, Keynesian, monetarist) critiques of MMT by mainstream economists. The truth is that most, if not all, of these economists share the same faulty presuppositions regarding what is euphemistically called “monetary policy.” The difference between mainstream and MMT economists is usually one of degree, not of kind.
Alan Greenspan, former Federal Reserve chairman (1987–2006) and most definitely not an MMT proponent, made a very MMT-friendly claim: “The United States can pay any debt it has because it can always print money to do that, so there is zero probability of default.” While this is literally true, and points to the fact that the nominal debt and dollars are not the issue, it overlooks the distortionary consequences from this manipulation on the entire structure of production. Nevertheless, such a claim is often also repeated by proponents of MMT, as if it contains some magic missing ingredient to unlock greater stores of wealth.
In fact, MMT provides a warranted critique to other schools of economic thought that share an underlying premise while not arriving at the same conclusions. .
(Excerpt) Read more at confoundedinterest.net ...
I have noticed a reality about people in general.
They don’t know where money comes from. When you present to them a description of Quantitative Ease, their eyes glaze over and they move away and you can see in their eyes that they come to a specific conclusion:
“This sounds insane but it cannot be and I must not understand it because it can’t be insane and others must understand it and I have to go pick up my kids from school . . . . .”
This is THE ONLY REASON the system holds together. People do not realize money is created from nothingness on what is a whim carefully enshrouded by bullshit invented terminology. If they truly knew it came from nothing, there would be torches and pitchforks in the streets as the mob comes to execute the world of economics.
Quantitative Ease was a phrase not even on the radar screen in the 1990s.
Now make no mistake here. Bernanke in 2009/10 had no choice. The global world of finance teetered on systemic destruction. He did his helicopter money and persuaded Congress to do the same. But that did not mean the world was saved. It just gave media time to announce that it was saved.
Capitalism has failed. All -isms have to fail because they are measured by the substance that comes from nothingness.
Buy farmland. Buy oil wells. Only calories and joules are immune to whimsy.
Alan Greenspan, former Federal Reserve chairman (1987–2006) and most definitely not an MMT proponent, made a very MMT-friendly claim: “The United States can pay any debt it has because it can always print money to do that, so there is zero probability of default.”
>
Capitalism has failed. All -isms have to fail because they are measured by the substance that comes from nothingness.
>
The Left+ won by shifting the English lingo. Criminal illegal aliens => ‘immigrants’ &, in this case, Free Markets => ‘Capitalism’
Course, the Fed. Rsrv. (& their fiat paper called ‘dollars’), being illegal (Congress having ZERO authority be bequeath its authority to another entity, let alone a non-govt one as well as NO Amendment created to abolish A1S10) should be null/void.
But, what do *I* know...being just a lowly (L) that can read/comprehend the plain English of the Constitution?
Depends on the lifetime.
Germany shut down the France central bank when they conquered them. They also let the Bourse operate with dictated prices.
So is that bankruptcy? Probably. The bonds would require payment in Francs but Francs no longer existed when the CB was closed.
Traditionally, soldiers occupying a conquered country would be paid in local currency. Not widely known. So francs of a sort had to exist, but they were not coming from France authorities.
Then there was Iraq. The buy and hold guys at the Iraq stock market didn’t do too well.
As for sovereign bankruptcy, there is no such thing because there is no global bankruptcy court to expunge debt.
As for sovereign bankruptcy, there is no such thing because there is no global bankruptcy court to expunge debt.
Not everything happens in a court. There is settlement outside of courts more often than not.
The satellite countries grabbed all assets in their borders. But they did assume the pension plans for their citizens.
The interesting thing is Russia assumed all the debt of the soviet union. ever wonder why?
“Capitalism has failed. ...
Buy farmland. Buy oil wells.”
If capitalism has failed it is too late to buy.
OTOH, purchasing an “oil well” is out of reach for most!
>>The interesting thing is Russia assumed all the debt of the soviet union. ever wonder why?>>
That’s pretty typical. When a country changes governments, the new government doesn’t get a clean debt slate.
This stuff is all carefully designed to get the casual human to just walk away and presume it all makes sense.
https://youtu.be/LtFyP0qy9XU?t=54 Voila
A word about mortgage rates: 7 percent is the historical average rate. I am old enough to remember money markets paying 16 percent annd my mortgage rate at 12 percent. Inflationary periods have always lasted years - decade from start to finish.
Anyone who tells you it will go down is deluded. Added to this mess is “ supply side” inflation. Even worse, IF war breaks out, inflation rates anlways increases by 40 percent….something the war cheerleaders should be aware off.
I fully expect inflation to keep rising ( except for a few “ false pull backs “) the trend will still be UP for another few years, even if Trump is voted in.
I forget the exact mechanism for it (because it’s insane) but some economists have floated the idea that the US should mint a single platinum coin and declare it to be worth $34T. Once minted, it can be deposited at the US Treasury, and the US debt will be gone.
It makes no sense for life in the real world. But to a certain way of thinking, “it’s a good idea”.
NO, they didn’t have to. It was a new govt. The other satellite countries did not.
Russia proactively assumed the debt. Why?
There is going to come a time when we can’t pay off our debt. What will happen?
What is the essence of bankruptcy? (not the set of federal rules)
Sovereign bankruptcy can and does happen. What does history teach us?
The bankruptcy of the USSR is an interesting study.
The problem with Capitalism is that the government is always getting in the way.
If Capitalism has failed why would you buy anything to resell? That is Capitalism.
In the article the author says that he sees no difference between MMT and the conventional monetary policy that it seeks to replace.
Everybody else sees a difference. The author has a beef with everything except his own pet theory so he lumps everything else into one pot.
There are those who believe government finances the spending of citizens and others who believe the citizens finance the spending of government.
That is how ridiculous money has become.
“I forget the exact mechanism for it (because it’s insane) but some economists have floated the idea that the US should mint a single platinum coin and declare it to be worth $34T. Once minted, it can be deposited at the US Treasury, and the US debt will be gone.”
I really doubt any real economists floated this silly idea.
I don’t know for sure but Nobel prize winner Paul Krugman seems like the sort of “real economist” who might step up and declare it a swell idea.
https://en.wikipedia.org/wiki/Trillion-dollar_coin
As I suspected, Nobel prize winner Paul Krugman DID endorce this idea.
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