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.”
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”.
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.
“The inflation of money and fiduciary media (artificial credit) causes economic miscalculations and boom-bust cycles, distorts the structure of production, encourages capital consumption, undermines the actions of individuals, discourages saving, transfers wealth from the citizenry to the government and those who are politically connected, affects money’s purchasing power, and has a whole host of other unintended effects.”
All bad, imo.
We are a lazy, addicted, ignorant, and undisciplined society. We will not change until it all comes crashing down.
And that arrives when the rest of the world doesn’t accept the buying power of the US dollar.
Hyperinflation.