Loading ...Modern Monetary Theory (MMT)
OK since we are all confessing how easy it is to be wrong and how hard it can be to realize and then admit it
Here is a Topic I would like to introduce….Modern Monetary Theory .
To begin….I like this quote from NorthStar …just posted in a comment to Alfa8
“Keeping an open mind and being willing to change your views are hallmarks of a truly great human being”
I agree and would like to begin this discussion by saying I am reflecting on the following Thesis and theories which have been central tenants of most of us who gather here at the tent.
My early thinking is that …I can certainly see that dismissing this new Theory out of hand may be very wrong headed. Not only do I think it may have more validity than we could ever have imagined but I HOPE with all my might that it is valid !
Here goes. Here I am quoting from my own reply in an email exchange with a former poster here who keeps in touch who sparked this debate….by sending me some info on MMT.
…………..
“OK…we need to think about all this with an open mind and a clean slate.
You and I have been long term Gold Bugs and have been “indoctrinated” to believe in the Austrian School of Economics theory…the only “Honest and noble theory “…
That eventually printing money exponentially will cause the same kind of inflation Weimer Germany Experienced and we will all be transported back to the stone age.
And Gold will rise to the moon and all that . ALL fiat returns to its intrinsic value…zero ! And all that jazz.
We have been expecting this for 20 or 30 years or more ( 50….Nixon closed the Gold Window.)
BUT in spite of a seemingly infinite creation of fiat from thin air…this has not happened YET
Now we have the conditions which will really decide who is right Austrian Theory OR Keynesian Theory… and its latest iteration MMT.
What if this actually works….How can we say for certain that it will not….I for one am not smart enough to just dismiss this out of hand.
Times have changed….one thing for certain….EVERYBODY IN THE WORLD…WANTS THIS TO WORK…Everybody is ready willing and able to play along with this and MAKE it Work…and that is a huge reason to believe it can and maybe will .
NOBODY WANTS THE MAD MAX SCENARIO..except for a few grumpy old goldbugs….
Personally I am ready to let go of all my preconceived ideas and give this a chance…and actually cheer the attempt on.
The alternative is too dark to even consider IMHO…what do you think ?
Thank you for sparking this discussion …I intend to take it to the tent
…..
MMT : https://www.investopedia.com/modern-monetary-theory-mmt-4588060
…..
Warren Mossler : https://en.wikipedia.org/wiki/Warren_Mosler
…………
Armstrong Historical Piece on MMT :https://www.armstrongeconomics.com/world-news/central-banks/modern-monetary-theory-v-central-bankers/
………….
Now I am going to present another Email Thread I have had today with a group of members and former members who have for some reason included me in their discussion of the Notorious “Q”Anon….that of course is a pet peve of mine as I believe this is the most ridiculous conspiracy theory out there…(on this I have no open mind.).but I did a lot of research to come to this conclusion.
Anyhow one of the members of this email group sent us an email entitled ” Meet the New Fed Head… Donald Trump”
and showed a piece which actually I read and had to agree with !
Trump IS now in Complete Control of the FED !!
Of course I admitted that it looks like Q was right about this .. then I had to point out the following.
……
“Thank you for enlightening me. This is incredible ..What a turn of events !!!
Trump IS in control of the FED through the US Treasury.
But do you realize he is endorsing and using FULL BLOWN MMT ! Wow !
What is MMT ? Please read this link to refresh your memory
https://www.investopedia.com/modern-monetary-theory-mmt-4588060
I would like to emphasize this paragraph and then please offer me your honest response to this
“Political leaders like Alexandria Ocasio-Cortez and Bernie Sanders have espoused MMT, and economist Stephanie Kelton, who first came across Mosler’s ideas on the listserv and is now arguably the face of the theory, serves as a senior economic adviser to Sanders.”
So what we have here is a COUP D’ETAT by the Far Left …AOC has now defacto taken over ….Democracy is DEAD
Long Live Socialism.
This is exactly what the far Leftists like Sanders and especially AOC have been demanding….
Free money for EVERYONE….next will be universal health care…they will demand it and Trump with his new found MMT magic wand will need to provide it after this Virus Epidemic decimates a good portion of Americans savings.
Who’s the Boss Now ?
Maybe Trump is their puppet…
How do you guys feel now that Trump has joined the far Left and is employing their remedies for the USA.
How do you feel now that he has betrayed his promise to pay down the debt .
How do you feel now that he is bailing out Wall Street and The banks and all the Billionaires and even small businesses and individuals…..
I though he was supposed to advocate for honest money..a new gold standard …and abolish the FED
He didn’t abolish it he just took it over and is using it to bail out the country with MMT …the tool of choice of AOC.
How does this feel….is he still your savior ?
Personally I find the irony Delicious
The Right and Left have finally aligned
The Rich and the Poor get bailed out…all at the same time…a Bipartisan effort…
The Virus has done the impossible !
Ha …you can’t make this stuff up
….
One last thing before we turn this over to the Round table
The estute member who sparked this debate has added something of great importance to this discussion.
The Eurozone :
This MMT stuff seems to be hinging all upon the Euro states right now as the independent countries within are NOT allowed to issue debt as such . ECB trying Eurobonds but central banks so far back and more negative rates will collapse them sooner than later. Germany kinda gave up by supplying money to keep banks from failing there which the Germans do not want to give money to Italy… but but may have to. If all the member states hunker down ,esp. with the virus lockdown, this may make them decide to leave the crutches of Brussels and print MMT instead of austerity from Brussels/ECB. Euro would crumble, usd spike and gold I don’t know . Money would flee to the DOW and hard assets like commodities so gold should catch a move as the central banks would be free from Brussels. All eyes on Europe. Germany proposing 1 year lockdown, Peeps gonna riot and chaos soon as they have lost all confidence in gov’t, yellowvests, china…..still festering so hard to imagine Europe/Euro staying together , not to mention Turkey released 2 million more migrants unto somewhere, we are all racists deep down so every country for themselves in my opinion. High us $ kill foreign priced debt repayments into one big ugly mess and then they rehash the currency basket. Trump even mentioned to ‘re-finance’ the debt a couple town hall meetings ago, maybe it would wash out then??? Oil stocks look as sick as gold ones now, big cleanout. Cheap gas but stay home eh! Miners even shut down mines so shortage/demand be only reason for a rise. I found some old notes from years back Armstrong wrote. Goes like this ‘ flight to dollar, interest rates to zero then move up sharply due to money supply”. Who’d a thunk? Ya I guess rates flip due to risk . He says 10-20% overnite no problem. Would I go borrow and spec build now ? Would the banks even give it to me, . Back to the Euro, central banks there don’t trust each other hence the FED 1 trillion day or else tits up. Lower usa rates hurt them more so eventually they default and gov’t pensions…. go poof. Yikes ,then strikes,protests…. hence the watch over there for MMT , split up and MMT forever I see as the next gig. Logically the Euro should crash, but …..! Thanks for the offer back in but shall pass as the squabbles get me nowhere with trading. Too many bowls as of late, price is moving average and old support/ resistance levels and nothing more needed. I gander Trump getting the army to build beds in arenas is him getting ready to say enough is enough and back to work as the peeps need freedom. Dow should flip up and dollar too. Dow level 15500 should be divergent low. Good conversing with you. MMT is unknown to most and the depths of it uncharted but if all gov’ts do it then it is all relevant to each and won’t matter book wise. Yup I’m ok and happy to see money to the peeps, last time Obama gave it to the banks and they squandered it so a good thing for mankind. Salud my friend !
JFC… First off there is nothing modern about MMT. Actually nothing new under the sun… somebody else said that right?? (ecclesiastical)
MMT delivers the Mad Max world
Time out here. Few understand what MMT is. It has been in practice since Aug 15 1971. What it is is the delinking of money from anything of tangible value. After all that is what money is. Money in the form of currency is simply a claim on wealth. MMT delinks this.
Open mind??? Christ
Well then what is the alternative ?
Without this MMT Mad Max comes NOW
And anyhow Trump is your boy Plunger and he is In charge…Trump derangement syndrome remember ?
Q says The Fed and Treasury have merged and therefore Trump is in charge and they are obviously following the MMT Playbook
MMT …aha..Mad Max Theory
Not sure the meaning Trump is my boy? Meaning since I am a US citizen thus by virtue of this he holds office in my country? or I am a supporter?
The alternative of course would be the same wise advice that was given to Herbert Hoover (but not followed ) by his thoughtful treasury secretary Andrew Mellon:
‘
“Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.”
Today is different than 1929
Everything and Everybody is supported by this debt
If you just Liquidate the farmers…You will have no food
Liquidate Real Estate and You will have no Shelter
Liquidate Labor and you will have no jobs !
Liquidate Stocks and you will have no corporations which also means no jobs
Liquidate all the indebted states and provinces and municipalities and you will have no police no garbage collection no teachers and NO Pensions.
This is Mad Max NOW !
Now I will say it……… JFC….this Melon guy was an idiot !
And if they had listened to him he would hove been the first to be tarred and feathered and castrated and then hung.
In a democracy YOU DO WHAT THE PEOPLE WANT YOU TO DO …OR ELSE !
NObody will vote for the guy who piously decides that living on the street for a while will do them some good
Sheesh….we are WAY past the time to liquidate …..I will take my chances with MMT
These guys think they can control the inflation…read the theory again.
It’s worth a shot
and if nothing else it buys us time to build a bunker.
Liquidate today and the banks close and you are shit out of luck today
Of course the analogy here is for someone to say, yes I am going to have an open mind. Ole Charlie Manson is just living an “alternative” lifestyle. Who am I to judge what he believes in. It’s ok I believe what I believe it’s perfectly ok for him to believe what he believes. Let’s just all get along… JFC
PS.. I have never been known to utter profanities on these sites… until now!
I see you are rather passionate about your views on this topic 🙂
No it is not a matter of passion, just pointing out the height of absurdity of the movement to even consider this path. As if there is not volumes of historical examples of where this leads.
I would like to note that just because the price of gold and silver rises to possibly crazy levels doesn’t mean “Mad Max”. In 2011 the world was just fine at $2,000 gold and $50 silver. The truth is most people I talked to between 2011 unit recently would ask me why I liked gold and silver, they would exclaim, “isn’t it going down?” They had no idea it had ever gone up. There isn’t any to be had anyways that I can see so raise the price to astronomical levels. Who would even care? Even after the virus is gone and the world celebrates, nobody would even notice gold at 10k and silver at $500. The rich would still own gold and the industry could easily still afford silver. I am sure I am over simplifying this so feel free to shoot holes in it.
Right
Mad Max comes from MMT
Marxists according to Lenin need central banks. mmt is to bring on the revolution. Marxist Monetary Theory is like being addicted to drugs in your food and saying hold the food. Life ending in OD better than reality.
MMT R U buying it?
https://stockcharts.com/h-sc/ui?s=mmt&p=D&yr=0&mn=7&dy=15&id=p84927846813&a=299281167&listNum=61
Fascinating topic. Here comes a simple answer. Anything that grows exponentially is unsustainable and will collapse. The national debt is rising exponentially… In a word… hyperinflation.
As is the virus
Regarding responsible economic policies causing Mad Max… The Spanish flu killed 675,000 in the USA yet the GDP increased during that period. It’s not the virus folks its the bubble that has been burst. MMT just makes it bigger.