This page has been archived and commenting is disabled.

Sean Corrigan Crucifies MMT

Tyler Durden's picture




 

While hardly needing a full-on onslaught by an Austrian thinker, when even some fairly simplistic reductio ad abusrdum thought experiments should suffice (boosting global GDP by a few million percent simply by building a death star comes to mind), Diapason's Sean Corrigan has decided to take MMT, also known as "Modern Monetary Theory", to the woodshed in his latest missive in a grammatical, syntaxic (replete with the usual 200+ word multi-clause sentences) and stylistic juggernaut, that only Corrigan is capable of. So sit back in that easy chair, grab your favorite bottle of rehypothecated Ouzo, and let the monetary hate wash through you.

Money, Macro and Markets

by Sean Corrigan of Diapason Commodities Management, and author of the excellent Santayana's Curse

As regular readers of these scribblings have hopefully come to appreciate, this is not the place to come to slake your thirst for mechanistic ‘models’ and fancy-dan macro-correlation studies (for the technically-minded, this is precluded by the subjectivist, methodological individualism of the Austrian School to which we adhere).

The only exception to this—if, indeed, an exception it is—is to be found in out penchant for mapping out developments in money supply and, in particular, real money supply and relating these to potential changes in the revenue stream percolating through the economic structure and, hence, to their implications for income, returns on invested capital, and the supportability or otherwise of the accumulated debt burden.

To an Austrian, the credit cycle IS the business cycle, while, more generally, the many disruptions to the progressive delivery of greater material satisfaction we suffer —outside of those forcefully visited upon us by the political process—are almost inevitably the result of some unlooked-for departure in the rate of provision of new money from that to which people had become accustomed. Just occasionally  it is not the supply itself, but rather some unwonted alteration to the eagerness with which money’s recipients hold on to that which comes their way which brings about these changes. In other words, every once in a while it may be a question of a changed appetite for, rather than a changed helping of, cash-at-hand which occasions a disruption. Such departures are hard to pick up from an inspection of the raw data, making their interpretation both more challenging and more a matter of inference than of brute manipulation of a  spreadsheet. Either way, once ‘monetary disequilibrium’ breaks out, look out below!

If there is one incontrovertible thing about monetary matters, it is that they offer a field rich in misunderstandings, obtuseness,  half-reasoned suppositions, and outright crankdom—much of it a wearily reworked canon of old fallacies dressed up in (terminologically)  new clothes by a profession which has long since decided that mathematical dexterity and political expedience is far more important than an awareness of its own history, meaning it never manages to build cumulatively on past insights, unlike the physical sciences which its practitioners so envy, alas!

Among the latest vogues is the so-called ‘Modern Monetary Theory’ - a truly laughable epithet, given that Mises was deriding its Chartalist-founding father Knapp’s vainglorious use of exactly the same term almost exactly a century ago.

Among its supposed ‘breakthroughs’ is the truism that a government which issues its own fiat currency can never go bankrupt—at least  in an accounting sense—and so should never shrink from commandeering ever more resources from its subjects (we shall overlook the mere trifle that it may well be able to set the nominal terms of its actions, but has little control over the real ones; or that there do, in fact, exist limits to its seigniorage, not least of which the one which arises when the mass no longer accepts the money which it has so determinedly debauched, whether or not taxes are to be paid in it!)

One of the classic examples of faux reasoning disported by this soi disant school of innovative thinkers is one which leaps from the tautological observation that a flow-of-funds reckoning of an economy—conveniently, if rudely, carved up into vast, faceless blocs labelled, ’Public’ and ’Private’—must see a net private surplus offset by a net public deficit (ignoring the external ’sector’ for the moment) and hence, that the overspending state is doing all its subjects a favour by living beyond the means honestly voted to it, otherwise their aggregate desire to acquire net new ‘assets’ (i.e. retaxed claims on taxes!) could never be fulfilled!

On this reckoning, the Greeks, far from being the most fiscally benighted and sorely afflicted of peoples, should rejoice in the effulgence  of their status as beacons of true MMT enlightenment and prosperity!

Suffice it to say that we can put this canard—one equivalent to saying that we benefit from paying protection money to the Mob if only the Capo holds the monthly dinner party for his lieutenants in our pizza parlour—firmly to rest after carrying out only the most trivial of disaggregations.

Absent the predations of the Provider State, individuals may well, on balance, engage in saving (with a view to better providing for their future needs) by acquiring claims on entrepreneurial endeavours, these latter being happy to put the funds so raised—and, by extension,  he resources so spared—to a hopefully profitable, productive use.

Under these circumstances, the consolidated balance sheet of the private sector will certainly still show a zero balance but the twin  aggregates which comprise this will show an expanding count of genuine capital accumulation, even without some insistent spendthrift in office to ’remedy’ the associated joint lack by throwing a good war, or an equally useless Olympics!

Moreover, MMTers also bruit about the ludicrous idea that such grossly confiscatory measures as are entailed by government spending and borrowing are easily justified because they ensure that an otherwise elusive medium of exchange is called into existence. In effect, they are asking us to believe that, short of having this paternalistic blessing conferred upon us by our selfless Platonic Guardians, it would be utterly beyond the wit of Acting Men to devise some alternative means of lubricating their frequent, voluntary, and so value-enhancing transactions. Risible!

As part of their insidious idea that no government can be too big, no deficit too wide—saving only that Leviathan has not foolishly ceded control of the printing press to some party beyond the reach of his coercion—the MMTers also insist that the gargantuan programme of monetisation being undertaken as part of the global bank rescue attempt has not and, moreover, cannot, under any circumstances, lead to ‘inflation’ (by which they conventionally mean sustained price rises in goods and services, of course).

Well, let us here quote the words of an early 20th century thinker on such matters, Harry Gunnison Brown, in the slightly different—but still relevant— context of denying that there can ever be such a phantasmagorical creature as a ‘liquidity trap’:

“...it has been argued… [that] it is impossible for banking policy - or any purely monetary policy devoted to increasing the circulating medium - to bring business back near to normal in any reasonable period, once depression has become acute. For, it is contended, the increased money will in any case merely be hoarded. Depression psychology will prevent borrowing from banks for business expansion, however large... reserves become through favourable Federal Reserve policy. Depression psychology will prevent any person or persons from whom the Federal Reserve banks purchase securities, from either investing or spending the money so received! And if the federal government directly supplements Federal Reserve policy, printing billions of dollars of new money which it then pays out to buy back or redeem federal government bonds, this new money will also be hoarded, every dollar of it, and so will have no effect toward increasing  the demand for goods and restoring employment! “

“In this view it would appear that if each person in the country, during a period of depression, were put into possession of more money than before whether twice as many dollars or 100 times as many or 10,000 times as many-there would nevertheless be no appreciable  increase in spending, no increased demand for goods and no stimulus to business and employment! Instead, production would remain low or even sink lower, spending would remain low or even become less, prices of goods would remain low or fall even lowed All this, of course, is preposterous nonsense but it is to such a conclusion that those economists must inevitably be driven who do not admit that monetary policy can possibly promote recovery from depression.”

Now it may well be the case that what Brown is here exploding is the nonsense associated more closely with the ineffable Paul Krugman and his fellow-travellers, but the MMTers seem to be even more precariously balanced than he, straddling as they are, the Great Deflationary Abyss— with one foot planted firmly in a land where live those who believe that money can be effective in reigniting a temporarily slackened desire to spend, but with the other dangling in mid-air, well short of the opposite bank where reside those who take this to the logical conclusion that too much money can likewise easily lead to far too much spending, vaulting us headfirst from the frying pan (or the freezer cabinet, as may be the more suitable image) and into the fire of inflation.

Memo to those who espouse this rehashed mumbo-jumbo: inflation is alive and well; central banks have been furiously expanding base (or outside) money and a good deal of that has gone into supporting the addition of new quantities of deposit (or inside) monies, to boot.

Unsurprisingly, this undertaking has seen the prices of bonds, stocks, and commodities increase, even if the usual concomitant of rising property prices has not yet become universal (largely by the happenstance that this was the pre-eminent medium through which the last inflation was given vent and hence its overhang remains largely unliquidated and its components in widespread oversupply in several of the worst offending markets).

Just look at the evidence. Despite the unquestioned disruption of the Crash itself and the fire-in-a-theatre rush for liquidity which it  occasioned, the central bank expansion programmes at just six prime exemplars have seen their combined balance sheets doubling in the past four years, with more than half that expansion coming since the first emergency injections began in earnest, in early 2009.

Money supply has risen by a not incomparable amount, even if the efficacy of the marginal bank reserve in generating bank demand  deposits has been reduced lately to below unity (partly, one suspects, because the pre-LTRO, pre-Draghi ECB was expanding more by providing its stricken and mutually-distrustful banks and sovereigns with an intermediate, ‘credit-wrapper’ than by a deliberate and very  un-German recourse to the money-spigot). As a direct consequence, prices have risen—i.e., whatever temporarily elevated desire there  has been to hold more money (whatever reduction in ’velocity’, if you must); whatever difficulty in accessing the credit with which to economise on the stuff itself; an expansion of the money supply has lead inexorably to a rise in prices—fiscal austerity and output gaps and other such Keynesian mental clutter notwithstanding!

To understand why we are here is one thing of course: it is yet another to try to work out where we seem to be heading next. If  aggressive monetary easing has pushed the likes of the US Small Cap index to all-time highs and triggered renewed buying of high-yield and emerging markets over the past few months, can we expect yet more largesse—and hence more price gains—ahead?

To answer this we must recognise that the world economy seems to have divided into three camps—a more ebullient US of A, a bemired  Europe, and an obscured Asia—so we have a triad of central bank actors to second-guess in each of these if we are to attempt a little divination regarding this question.

In the first of them, the Fed seems to have truly let the dogs out: even without the launch of what seems an increasingly-redundant  QEII, the aggregates are surging ahead as domestic banks eat into their excess stockpile of reserves (cash down $135 billion, bank credit up $375 bln to a new high, C&I loans up $100 bln).

We have previously shown that the rate of money creation is currently further above its 30-year real trend than at any time in that  sample, but, for the sake of variety—and with a firm injunction not to take the projections as anything other than broadly illustrative—we look instead at money supply per capita. Here, too, a clear pattern emerges.

Zero growth in the halcyon days of the 50s and early 60s saw CPI typically around 1.5%. 5.5% compound money growth in the rather  less complaisant two decades which followed saw average CPI lurch up to 5.7% before a deceleration to 4.2% per head in money and a  coincident 3% rate of typical yearly price increases. Fast forward to the QEra and we have been running at nothing short of 10% per annum—an outpouring which risks—on the showing of the previous regimes—a typical CPI rate somewhere in excess of 7%. If long maintained, it will also acclimatise the economic structure to a level of laxity which cannot indefinitely be sustained, something which therefore sets us up for a nasty setback—and a prematurely renewed stimulus—whenever the Fed finally moves to regain control of the stampede it seems to have unleashed.

As for our second main player, the ECB, this week marks the second great confusion of capital with liquidity comes to its  multiple hundreds-of-billions second installment. Expectations are high—as they were ahead of the apparently successful (but yet to be  implemented) negotiation of the Greek debt accord. Your author, however, cannot entirely suppress the nagging suspicion that, just as  that ostensible landmark brought only grumbling, not relief, perhaps Super Mario will also fail to excite jaded palates and a near-term disappointment might be the result no matter how clear the progress to full Weimarization. We shall see.

Further out in Asia, where the world’s marginal consumer of and producer of stuff has slipped into the statistical Lunar shadows of the New Year holiday, all is meant to be on the up again as the PBOC has unveiled not one, but two successive cuts in reserve requirements.

The act has not exactly been greeted with dancing in the streets, however, one reason for which may be that it has simply addressed a touch of overkill in cranking up the ratios last year. More binding at this stage may be a loan:deposit ratio which seems to have surged to six-year highs. At a point where the average rests only 3 points below the mandatory ceiling, this must leave a sizeable tail of the distribution scrambling to avoid official sanctions and so hardly best placed to swell its constituents’ already engorged loan books.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 02/29/2012 - 23:40 | 2211041 Seize Mars
Seize Mars's picture

Right on, man!

Thu, 03/01/2012 - 00:02 | 2211116 nope-1004
nope-1004's picture

 Fast forward to the QEra and we have been running at nothing short of 10% per annum—an outpouring which risks—on the showing of the previous regimes—a typical CPI rate somewhere in excess of 7%. If long maintained, it will also acclimatise the economic structure to a level of laxity which cannot indefinitely be sustained, something which therefore sets us up for a nasty setback—and a prematurely renewed stimulus—whenever the Fed finally moves to regain control of the stampede it seems to have unleashed.

Precisely!  The FED is in a box and has to keep the stimulus coming.  Benocide is a bold faced liar, that's all.  Inflation is here - any idiot shopping for food knows it.  They will keep hitting PM's to keep a lid on the debauchery, but at some point this pig is going to squeel.

 

Thu, 03/01/2012 - 11:55 | 2211362 RockyRacoon
RockyRacoon's picture

My favorite:

... it is impossible for banking policy - or any purely monetary policy devoted to increasing the circulating medium - to bring business back near to normal in any reasonable period, once depression has become acute.

Depression is becoming acute, and shall be full-blown in short orderIt is merely masked at the present time by the government hand-outs and shadow banking maneuvers.

Thu, 03/01/2012 - 00:02 | 2211120 Taku
Taku's picture

Is there perhaps a customizable color palette for the new planetary fortress? I'm rather partial to 'carbon grey' or 'titanium grey', y'know..

Thu, 03/01/2012 - 03:24 | 2211559 XenoFrog
XenoFrog's picture

I'd stick with an orbital command unless it's a hard to defend expansion.

Wed, 02/29/2012 - 23:40 | 2211045 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I'll grab a beer, Tyler.

Cheers!

Thu, 03/01/2012 - 00:53 | 2211262 Manthong
Manthong's picture

My ouzo is overcollateralized..

But my retsina is rehypothecated.

Wed, 02/29/2012 - 23:41 | 2211047 spiral_eyes
spiral_eyes's picture

Let's be clear Tyler: MMT is so wacked out and inflationary that even Paul Krugman understands that its full implementation would lead to currency crises.

Thu, 03/01/2012 - 07:16 | 2211733 schismjism
schismjism's picture

Krugman doesn't understand MMT, as should be plain to anybody who follows the topic even in the slightest. And for all you Austrians out there who keep predicting the collapse of the US bond market, the collapse of the UK bond market, the collapse of the Japan bond market, how are those predictions going? MMT predicted the outcome of all three.

MMT 3 - 0 Austrians

Thu, 03/01/2012 - 10:08 | 2212239 Toolshed
Toolshed's picture

Yeah.......I guess you could say "Mission Accomplished!"  I think you may be declaring victory a tad prematurely, however.

Thu, 03/01/2012 - 11:32 | 2212626 ATM
ATM's picture

Reminds me of the Nazis claiming total victory during the throes of the Battle of the Bulge! yes the MMTers are claiming victory but that war itself is already lost. 

Thu, 03/01/2012 - 10:32 | 2212348 Lednbrass
Lednbrass's picture

Indeed, lets see how things look in the back half of the decade.  Your post is akin to declaring that you beat the spread after the first quarter of a football game.  There are a very large number of complex interactions yet to play out.

Wed, 02/29/2012 - 23:43 | 2211053 Sophist Economicus
Sophist Economicus's picture

Bravo Sean, Bravo

Wed, 02/29/2012 - 23:47 | 2211066 r00t61
r00t61's picture

I wish that people would stop rebutting Keynesians, Monetarists, and MMTers (K/M/M).  The K/M/Ms have no new arguments to be trotted out in favor of their economic "theories", and the likes of Bastiat, Mises, and Rothbard have already smacked them down long ago.  To continue to engage them in debate is to actually give their discredited thoughts an air of credence. 

After all, what value is there, in, say, debating whether astrology controls the destiny of mankind?

Thu, 03/01/2012 - 00:08 | 2211133 bigwavedave
bigwavedave's picture

god has a plan for all of us. except astrologers of course.

Thu, 03/01/2012 - 00:09 | 2211136 gwar5
gwar5's picture

Wish that were so, but they won't take utter collapse for an answer. Gonna have to dance on their grave and make fools of them so the next monetary system will be a sound one.  The Keyensian bastards are already trying to scapegoat capitalism for the failure of their fiat propelled welfare-statism.

 

 

 

Thu, 03/01/2012 - 11:36 | 2212645 ATM
ATM's picture

but, but, but.... it's the speculators! And the hoarders!! And the bourgeoisie!

LOL. I thought that shit went out in the 1920s but then the US elects Obama. History repeats.

Thu, 03/01/2012 - 11:34 | 2212643 andyupnorth
andyupnorth's picture

+3 for  Bastiat, Mises, and Rothbard!

and +1 for Ron Paul!

Wed, 02/29/2012 - 23:59 | 2211110 Lednbrass
Lednbrass's picture

Thanks,  I have been reading up on MMT lately and its new "MMR" variant and this covers some of the weak spots.

I do expect though that some MMT or R adherent will say this is an entirely invalid comparison because Greece doesnt print its own money.  They do at least recognize that "money" is now simply created in vast amounts by pressing a button with nothing whatsover to back it or keep it as a store of value and labor, but after that it kind of goes off the rails for me.

Thu, 03/01/2012 - 00:24 | 2211178 putaipan
putaipan's picture

i ain't even gonna try to read the above article. at least when i read

dr. hudson i can understand him. what the haters never mention tho'

is the other half of what they are suggesting- monetary policy is balanced

by a land/rentier tax. i won't even try to explain/defend that around here-

("....what !?! raising taxes on my home! they're already to high! etc)

Thu, 03/01/2012 - 07:36 | 2211750 putaipan
putaipan's picture

ok ok . i gave it my best black sambucca effort. no luck. this guy is a

wanker compared to the folks at u.m. kansas city. and like i said- they

do not isolate monetary policy outside of taxes and .... regulation and

prosecution- plus, they've got bill black on their side .live from italy-

http://www.kpfa.org/archive/id/78274

 

Thu, 03/01/2012 - 00:28 | 2211192 traderjoe
traderjoe's picture

I'm no MMT adherent, but as I understand it - it proposes the sovereign printing money as opposed to borrowing money from private corporations through fractional reserve banking. In that sense, the United States Note (Lincoln Greenback) is a form of MMT. In addition, no taxes are required under MMT because the sovereign can print money without revenue. Sure it would be inflationary over time (all governments spend spend spend). But IMHO a no debt-money system with no tax regime is better then what we have now.

Thu, 03/01/2012 - 09:41 | 2212114 Lednbrass
Lednbrass's picture

But what happens when all of humanity concludes that (under MMT) they dont need to work at all because the government can just create vast amounts of money infinitely, that there is no need for a bond market, inflation is a must but benign, and taxes are only there for the hell of it to reduce demand?

What would be the point of doing anything? Heck, everyone would go fishing or to the beach- why bother with work? Just print some money and hand it out.  "Gimme my check Uncle Sam" as a lifestyle choice would comprise the majority of the population.  Anyone who does work at that point would be a fool.

I cant help but think that everyone jumping on that bandwagon would have some rather unintended consequences which are only addressed by vague phrasing like "government must be a good steward of the currency" and rather nebulous references to productivity (as if anyone would bother should that view be accepted).

Thu, 03/01/2012 - 13:43 | 2213238 Vinz Klortho
Vinz Klortho's picture

I don't see anything from the MMT people that I have read that suggests anything like what you are suggesting.

Inflation is the result of creating money in excess of the productive capacity of the economy.  No productive capacity == no money creation.

You should spend your time reading to understand MMT, rather than making false statements about it based on your ignorance.

Vinz Klortho

Fri, 03/02/2012 - 11:12 | 2216718 Lednbrass
Lednbrass's picture

Then it should be quite simple for you to produce something that shows a definite, universal, provable relationship between productivity and inflation or currency creation by the banking sector.  I have not been able to find it and suspect you cant either. Sounds good as a general proclamation- now prove it. If you have somethign that proves that productivity and inflation are linked I would love to see it, and would also like to see something showing that when productivity is reduced so is the creation of fiat currency.

That you think human beings would continue to go out and work if MMT became universally accepted is naive in the extreme, they would not and would simply elect leaders who would continue to create currency- after all the government and banks can just continue to make as much as they want.  Feel free to lecture people on the need for "productivity", but in the real world on planet earth if humanity accepted the premises of MMT the entire thing would fall apart. Remove all taxation and cancel all bond auctions tomorrow- the resulting chaos would be tremendous.

Cullen Roche has repeatedly stated the underlying assumption that government must be a good steward of currency in order for it to function in multiple places, though he has rewritten a bunch of his stuff and may have removed those exact words.  Once again, this sounds good on paper but will be (and is currently) being abused severely in the real world.

Though in some ways it may be desriptive of how things currently work, it is describing a system that is not viable in the long run and in the process of failure.

Fri, 03/02/2012 - 12:43 | 2216974 Vinz Klortho
Vinz Klortho's picture

As I point out in my other comments, the weakness of MMT as a monetary system is in the political aspects, not monetary operations.  The monetary aspects are just the realities of a fiat money system.  My belief is that politically, MMT would be viable only in a small government system where the powers of the govt are greatly reduced over what they are now.

Vinz Klortho

Thu, 03/01/2012 - 10:54 | 2212423 El Viejo
El Viejo's picture

Thanx Joe for a crumb of intelligence in a sea of stupidity. Now please explain why Greece is not an example of MMT. Maybe one or two of these idiots will learn something from it.

Thu, 03/01/2012 - 13:45 | 2213248 Vinz Klortho
Vinz Klortho's picture

Please spend more time reading the information available on MMT.

Taxes serve a function in the system.  Inflation is possible, but not required or inevitable.

Vinz Klortho

Thu, 03/01/2012 - 00:02 | 2211118 gwar5
gwar5's picture

Notes:  While Bernankistan was talking smack about more QE which killed the gold and stopped equities, a massive, but little noticed $714 Billion QE was dumped into the ECB.  Gold back up $25 tonight.

 

Thu, 03/01/2012 - 00:05 | 2211127 Sophist Economicus
Sophist Economicus's picture

Duly noted and am enjoying the bouyance of the PMs.   Feels like these guys are starting to loose the war at last

Thu, 03/01/2012 - 00:04 | 2211124 Coldfire
Coldfire's picture

Coruscating.

Thu, 03/01/2012 - 00:11 | 2211135 Yen Cross
Yen Cross's picture

 I read this " Article", and understand the syntax of it. It " REEKS" of Hildebrands' wife.

   SNB _-_-_--_

Thu, 03/01/2012 - 00:46 | 2211138 sitenine
sitenine's picture

Word of the day: seigniorage

http://www.answers.com/topic/seigniorage?method=26&initiator=CANS

Who ever would have thought that there was a even word for that?

Totally awesome.

If you dig cartoons like I do, this oldie will explain why this is going on.

50-year-old CARTOON TRIED TO WARN US

http://www.youtube.com/watch?v=-CjrZNi49bE&feature=related >

Just what the hell have we been teaching our kids in these past 20+ years anyway?

[edit] I've seen a few posts about Bernank killing PMs today.  Rubbish.  Check out this SD article -

http://silverdoctors.blogspot.com/2012/02/cartel-dumps-225-million-ounce...

Thu, 03/01/2012 - 00:11 | 2211141 Count Manzeppi
Count Manzeppi's picture

Your diction is precise, yet your message is lost. :(

 

Thu, 03/01/2012 - 00:28 | 2211191 Count Manzeppi
Count Manzeppi's picture

OK, OK...so I'm drunk and I prefer the Mogambo Guru style of delivery. SUE ME! :)

 

Thu, 03/01/2012 - 00:19 | 2211154 ebworthen
ebworthen's picture

"Your author, however, cannot entirely suppress the nagging suspicion that, just as  that ostensible landmark brought only grumbling, not relief, perhaps Super Mario will also fail to excite jaded palates and a near-term disappointment might be the result no matter how clear the progress to full Weimarization."

Donkey Kong (the FED, or central banks) eventually loses.

Too bad Mario is trying to save Princess Peach the bankster instead of Princess Peach the Plebian.

The charts don't lie; debt, debt, and more debt along with money printing.

How this doesn't cause currency debasement and stagflation only the Bernank can conceive of in his wet dreams.

If they wouldn't recommend this course of action for the individual and household there is no reason they should be pursuing it themselves; unless of course they suffer from a severe case of hubris combined with a pox of fallacious boils.

Thu, 03/01/2012 - 00:19 | 2211159 Yen Cross
Yen Cross's picture

 Easy. Limpus Impressionis<>  Lack of cash = lack of Ladies.

Thu, 03/01/2012 - 00:23 | 2211175 GovtMediaLiars
GovtMediaLiars's picture

Great article. Those MMT guys and their accounting identity smokesceens rub me the wrong way. Just more utopian central planners no different than any others.
Mises forums are filled with refutations of their nonsense as well. 

Cheers!
GML
Market Madness
http://financeandopportunity.blogspot.com/  

Thu, 03/01/2012 - 00:33 | 2211200 hotkarlandthecl...
hotkarlandtheclevelandsteamers's picture

MMT'ers are always good for a laugh...like that bozo over at pragcap.com.  Oil will be 250 SPY 200 Gold 3000, he will still say no inflation.

Thu, 03/01/2012 - 00:43 | 2211234 Carp Flounderson
Carp Flounderson's picture

Thinking Greece represents anything in MMT other than a perfect example of NOT MMT shows this guy didn't spend more than 5 minutes reading about the material Tyler claims he "crucifies".  Nothing here but  syntaxic masturbation.  Massive massive fail.  There's plenty material written in the past few months showing the relationship between Austrian and MMT economics.  They're far closer than anyone here gets.  Use the googles.

Thu, 03/01/2012 - 01:33 | 2211376 dootyfree
dootyfree's picture

Exactly.  You would think someone would would want to understand what they are writing about.  Embarrassing.

Thu, 03/01/2012 - 09:31 | 2212036 Implicit simplicit
Implicit simplicit's picture

Changed location.

Thu, 03/01/2012 - 00:49 | 2211249 Yen Cross
Yen Cross's picture

You people are still talking about Greece?  PSI and all that stuff?

Thu, 03/01/2012 - 00:49 | 2211251 q99x2
q99x2's picture

No wonder 17 states are considering State Banks.

Thu, 03/01/2012 - 02:17 | 2211476 Milestones
Milestones's picture

deleted

Thu, 03/01/2012 - 00:51 | 2211255 chindit13
chindit13's picture

Unless one is already a convert to the faith, this message is lost in the verbiage and Rube Goldberg-like structure.  He needs to understand cadence.  Though I am prone to prolixity myself, I must admit I find Thomas Pynchon easier than Sean.

Thu, 03/01/2012 - 00:58 | 2211279 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Your last sentence should have been seperate from the rest.  

It made your critique awkward.

Thu, 03/01/2012 - 02:22 | 2211486 Milestones
Milestones's picture

Well "The Crying of Lot 49" and "V" were not bad I found Sean easier than other Pynchon works. I do agree however, Sean was showboating with some of thee stuff he wrote. Interesting anyway.         Milestones 

Thu, 03/01/2012 - 05:51 | 2211685 Element
Element's picture

Yeah, but what does that drivel have to do with the real economics of earning a living and paying your way through life?

Times 7-billion

What a load of sophist wanking.

Thu, 03/01/2012 - 06:26 | 2211702 simone
simone's picture

Element,

There is a wonderful script that lets one block asinine users.  It's not too user friendly, but well worth the effort to get it running.  Let's you avoid the drivel.  Give it a try.

http://userscripts.org/scripts/show/124836

Simone

Thu, 03/01/2012 - 09:43 | 2212124 chindit13
chindit13's picture

Though I suspect you are addressing me, I frankly don't know to whom Element was referring, as the author has a hundred lines of something that may not be sophistry but certainly is barely penetrable, and has little to do with "the real economics of earning a living and paying (your) way through life?"  And damn, I had Bernanke for a prof, so I am well experienced suffering through any and all varieties of economic alchemy and other dark arts.

Please use your wonderful script to block any future comments I might make.  I'd really hate to offend any delicate sensibilities.

 

Thu, 03/01/2012 - 11:31 | 2212510 simone
simone's picture

chindit13,

One cannot have delicate sensibilities and enjoy this site.  

I addressed my remarks to Element but think that I may have been too abstruse in an attempt to avoid the retributively vituperative sass prevalent to this blog.  I think that Element would do well to block his own comments.

Simone

Fri, 03/02/2012 - 05:38 | 2216177 Element
Element's picture

Do you have a problem with the real economics of earning a living and paying your way through life?

Or do you just prefer sophist wank?

Your wee censorship-script does not work for you then?

"... do well to block his own comments. ..."

That's a touch abstruse! ... borderline wanky even.  

Or you would like to imply there are people who can make one shut up, and the "do well" bit means, take a hint?

Guess I'll never know.

And Simone ... one last thought ... go to Hell.

Thu, 03/01/2012 - 00:53 | 2211261 AgShaman
AgShaman's picture

I can't remember the last time they "threw" a good war....though I wasn't around for the Halcyon days of the 50's and 60's.

My guess is the only impressive phantasmagorical creatures present within the modern day economic theories are the beasts that hide themselves with camouflage...pretending it's not a component worth mentioning. Grow your Imperialism via a War Machine and you do what most conquering bodies over the history of mankind have done....continue to absorb and engulf until the fiscal management of the Empire becomes a crushing body of work....or in some cases, illusory projects

Thu, 03/01/2012 - 01:29 | 2211298 Caviar Emptor
Caviar Emptor's picture

Yes. "Government is the problem", unless you're a bank or Wall Street or the insurance industry circa 2008-2012. Or if you're an oil company, banana grower, or telecommunication company that needs protection abroad. Or if you're a defense contractor or private security firm. Or a big cap during a financial crisis like GE in 08 and the capital markets are frozen and you need sort term money just to meet payroll 

In all of those cases, government was the solution. In a big way

Thu, 03/01/2012 - 02:05 | 2211449 AgShaman
AgShaman's picture

I wonder if GE employees have to pay taxes?

And if they do....are they pissed off they are working for a company that does not pay any tax....yet they are required?

Thu, 03/01/2012 - 00:58 | 2211280 AU5K
AU5K's picture

Groupon today, continent wide in Asia - Gold on sale and has found a bid.  +27. 

Thu, 03/01/2012 - 01:06 | 2211300 sitenine
sitenine's picture

Confucius say, BTFD.

Thu, 03/01/2012 - 01:18 | 2211341 LMLP
LMLP's picture

Is it just me or does this article make you want to find Sean and punch him in the head!!??

Thu, 03/01/2012 - 01:39 | 2211383 Böhm_Bawerk
Böhm_Bawerk's picture

Well, the writing is atrocious. If punching him in the head would bring his writing style back to earth, I'm all for it.

Thu, 03/01/2012 - 03:12 | 2211551 Seua
Seua's picture

As Tyler said, "reductio ad abusrdum."

Thu, 03/01/2012 - 01:23 | 2211345 bilbao
bilbao's picture

Crucifies?

GREECE IS NOT AN EXAMPLE OF MMT.

Greece is a currency user not a currency issuer. Greece can go bankrupt. 

Thu, 03/01/2012 - 02:11 | 2211361 Ungaro
Ungaro's picture

There is only one possible outcome of trying cure too much soveriegn debt ("hyperfenusia") with more debt: hyperinflation. The road to it may take us through a righteous war (for we'd never fight any other kind), wage and price controls, rationing and other futile governmental efforts to "whip inflation now".

I have absolute faith in Dr. BS Bernanke that he will be able to mop up the trillions of liquity sloshing around in the system. He will sell the attractively priced assets (Maiden Lane pools, mortgages, and T paper yielding as much as (OMG!!!!) 3%). To whom, you ask. Well, there will always be a buyer for US paper, the only question is the price. Which is the very flame that feeds the inferno of hyperinflation. 

Thu, 03/01/2012 - 01:39 | 2211382 sasebo
sasebo's picture

The only problem with all that funny money the fed is creating to pay off the TBTF's bad bets is that there's not enough real stuff (real wealth)to acquire with it. So the fat cats use it to acquire phony wealth like stocks, bonds, CDS's, CDO's, derivatives, etc. These are only real wealth if you can exchange them for money and if there is enough real wealth to buy with the money.

Or else it's all just funny money.  

Thu, 03/01/2012 - 02:44 | 2211521 Yen Cross
Yen Cross's picture

 I surmise some good people Tyler!   I'll see you In a few hours.

Thu, 03/01/2012 - 02:47 | 2211527 Yen Cross
Yen Cross's picture

 Gentelmen and Halcyon?

Thu, 03/01/2012 - 03:01 | 2211542 Cynthia11640
Cynthia11640's picture

I thought he was saying that its all just cycles. One minute your up, the next you are down. The fed ecb and china are all taking measures to compete with each other and the people are just at the bottom trying to figure it all out. But there are no answers for the people only credit cycles. I suppose at the end of this race we will know who came out ahead. Until then all we can do is wait and see what happens.

Thu, 03/01/2012 - 03:21 | 2211558 Yen Cross
Yen Cross's picture

I KNOW how to Read a chart, you mental midgets. I warned  you about the crosses.

Thu, 03/01/2012 - 03:38 | 2211568 _ConanTheLibert...
_ConanTheLibertarian_'s picture

MDB

The Libertarians are always trashing the superior Modern Monetary Theory with their simplistic ideas. We need to spend, spend, SPEND!

/MDB

Thu, 03/01/2012 - 04:32 | 2211634 Jo
Jo's picture

MMT/MMR peeps are the classroom nerds who never get the girl.

Thu, 03/01/2012 - 07:43 | 2211759 putaipan
putaipan's picture

didn't work out too bad for kuccinich.

Thu, 03/01/2012 - 04:47 | 2211647 Paracelsus
Paracelsus's picture

I don't think the euro can be saved.This business about Greece reminds me of the final weeks of Lehman,watching the graph keep dropping. I suppose it really is about confidence and trust,and when fear or panic takes hold....

I don't think this mess can be contained,and I think a war is right around the corner (oh,that's right we have a few...).

Some writer said that during the grim days of the Cuban missle crisis,"there was a strong smell of Hydrogen in the air".

I wish there were some answers out there (Iceland?).

Perhap a Deus ex Machina for this tragedy?

Thu, 03/01/2012 - 04:53 | 2211651 Happy Swede
Happy Swede's picture

What a load of rethoric BULLSHIT. He has no idea what so ever about the operational realities of the monetary system. Picking Greece as an example of the failure of "bloated" gov is proof of this, Greece is NOT MONETARY SOVEREIGN and hence fall outside the MMT/MMR theory. Monetary sovereignity or a "printing press" as it is popularly described is the cornerstone of the theory.

 

Thu, 03/01/2012 - 17:36 | 2214651 m111ark
m111ark's picture

There is no nation that controls it's own currency, no "Monetary sovereignity."  Every nation borrows it's own currency.  Greece, not having a central bank to call it's own, cannot print money via QE.  There are occasions when the central bank of a nation, (Japan, US, ECB) can buy sovereign debt which in the only way governments can "print" money, and that happens rarely, except of course, in todays world. 

MMT is a pointless argument in a world where governments DO NOT print money.

Thu, 03/01/2012 - 05:02 | 2211658 cnhedge
Thu, 03/01/2012 - 05:37 | 2211678 Element
Element's picture

Bravo!!

I wonder if ANY of the MMT academic and investment advisor goblins have ever run a small-business, one that actually makes and sells real stuff to people, in return for dollars?

I have.

MMT is insanity to real businesses and to a real economy, and to real budgets and to real returning investments.

MMT will, and does undercut and destroy the whole process of work, trading and making an honest livelihood.

That may seem quaint to all the fakers playing with paper this and thats, but once you strip away all the bullshit from the maaarrkit (leaving not much remaining), this is what REALLY makes the world go around ... it's not da muney.

 

(Gonzalo Lira said he was going to destroy MMT in some upcoming articles during his mid-2010 hyperinflation zh postings, Re treasuries, USD and volker playing good-bastard ... but we never heard another peep from him RE the MMT harange)

Thu, 03/01/2012 - 05:59 | 2211691 Zero Govt
Zero Govt's picture

"To an Austrian, the credit cycle IS the business cycle.."

There's your problem Austrians.

While Austrians are the best of a crap/clueless bunch (ie. economists) pegging the business cycle to credit flows is akin to blaming the winter on the growth of animals furry coats

Credit growth is an effect of individuals bullishness or bearishness, not a cause ...nor will the credit scores indicate anything but where you've been (ie. as useful as last months newspapers) 

Economists have been measuring economics by inanimate objects (like credit, like P/E ratios) which is about as useful as betting on a horse based on measuring all the nags inside leg measurements. It gives no indication of the ability of the beast

The statistical average man does not exist, he is a figment of the academics controlling imagination. The busines cycle does not exist as it is an averaging indicator, like the stock market, but does not represent any of the individuals/components within it.

The sooner we stop the flow of this collectivist bullshit that feeds Govts economic nannyism/vandalism the better

Thu, 03/01/2012 - 06:04 | 2211695 Element
Element's picture

Nice +

Thu, 03/01/2012 - 06:02 | 2211692 Genève Barbegazi
Genève Barbegazi's picture

"Further out in Asia, where the world’s marginal consumer of and producer of stuff has slipped into the statistical Lunar shadows of the New Year holiday, all is meant to be on the up again as the PBOC has unveiled not one, but two successive cuts in reserve requirements.

The act has not exactly been greeted with dancing in the streets, however, one reason for which may be that it has simply addressed a touch of overkill in cranking up the ratios last year."

 

Yeah, that or they are going to lever up and play the Westerners' game so they can best position themselves for the eventual reversion to a commodities backed currency...use all those dollars they earn to buy tangible assets while the dollars are still worth something...i.e. recent (and stealthy) growth PBOC's gold reserves...

Thu, 03/01/2012 - 06:12 | 2211699 Element
Element's picture

Who prints in MMT? = Tribal Central Bankster

 
Accounting-Identities really aren't all that complicated.

Thu, 03/01/2012 - 06:33 | 2211707 onebir
onebir's picture

"in his latest missive in a grammatical, syntaxic (replete with the usual 200+ word multi-clause sentences) and stylistic juggernaut, that only Corrigan is capable of."

I think a certain T Durden is being unnecessarily modest here :)

Thu, 03/01/2012 - 07:14 | 2211732 BlackholeDivestment
BlackholeDivestment's picture

 

 

 

                                                      MMT

                                             Meathead Muse Trick

                    Occult ''Magi (k)c&Not So Sunny Shine On You Crazy Dimon''

                                           Entertaining Familiar Spirits

                                                offer of temptation      

                                                  U.N.enlightened

                                                   New World Order  

                                                      Death March

                                                     bottomless pit

                                                         Darkness

                                                            Down 

                                                               D

                                                               o

                                                               w

                                                               n

                           http://www.youtube.com/watch?v=jqAtECtT5aA&feature=related

Thu, 03/01/2012 - 07:23 | 2211741 m111ark
m111ark's picture

As I read, terrific, someone with gravitas to refute MMT.  Perhaps he has done so, somewhere, within that load of 3 dollar words; but is he trying to communicate or show off? 

It's simple enough, really.

There is no government currently printing it's own money, every government borrows it's own currency.  Normally, governments borrow from the capital machine, that pool of capital looking for a safe return.  Central banks create new money out of thin air when they buy government bonds, notes, etc., which the bernank calls QE. 

Anyone see a problem with this scheme?  Any resemblance to a ponzi scheme here? 

The only way new money gets created in normal times is when someone takes out a loan. 
That new money is created out of thin air by the bank.  It's commonly believed that banks lend out depositors money but that's not correct.  A banks deposits determine how much new money it gets to create.  That's why banks want more customers' deposits.

Anyone see a problem with allowing banksters to control the issuance of new money? 

MMT is completely without merit today because governments do not control their own currency.  But does that mean private banks should control the currency? 

Banksters gain their power by contolling a nations currency.  The ponzi scheme unravels when there is no credit worthy person (remember, corporations are people too my friend)  to borrow new money into the system.  The Bernank steps in to create that new money because no one else can.  However, theirs no productivity gain as that new money simply goes to the government which is not in the business of creating value. 

At least, not in the way our current monetary system is structured. 

IF, governments controlled the issuance of their own currency, how many of our current problems would simply vanish? 

So, why has the whole world sunk to it's knees before the bankster?  Why do governments borrow their own currency?  Why do we the people borrow from private banksters? 

It's the system that's the problem.  And the system is made up of people, so, one could say that people are the problem.  Until people are able to do, act and think responsibly, we will be at the mercy of the bankster.  So do your part to starve a bankster, be a better person.

 

 

Thu, 03/01/2012 - 07:50 | 2211770 jdoo
jdoo's picture

Banks are capital constrained, never reserves constrained.  If a bank sees a worthy loan opportunity but does not have the reserves to lend, they can always go to the interbank lending markets and secure the reserves there.  You can quickly see then that the Fed controls the level of aggregate reserves, and bank lending is only constrained by capital requirements.

Thu, 03/01/2012 - 15:47 | 2213860 m111ark
m111ark's picture

I don't agree.  Capital requirements are determined by not only reserves but by shareholders equity, retained earnings and other debt instruments.  While the FED is supposed to govern banks reserve requirements, does anyone still believe that the FED controls the banks?  It is my friend, just the opposite.  The FED's function is to grease the path for the banks and rescue them should they exceed even their outsized greed. 

But, so what!   My point, which I didn't think needed spelling out, is that it is never a good idea to allow banksters to control a nations money supply.  Just as every ponzi scheme eventually fails, so too must every monetary system in which banksters control the money supply.  Debt money is never a system on which to build a nation.  Governments must take back that function.  But not this government, nor any one likely to replace it.  We the people must become responsible, moral, just and law abbiding rather than what we have become. 

Thu, 03/01/2012 - 07:47 | 2211764 Wakanda
Wakanda's picture

I love the smell of tortured prose and waterboarded syntax in the morning.  : >

You go Sean!

Thu, 03/01/2012 - 07:47 | 2211765 jdoo
jdoo's picture

This missive hardly crucifies MMT.  He clearly doesn't understand MMT as Greece does not have monetary sovereignty.

Thu, 03/01/2012 - 09:38 | 2212103 Implicit simplicit
Implicit simplicit's picture

First point: It is not he primary effects of MMT, but the tertiary affects f that hit Greece. Gladman Sucks was an early MMT recipient, and used money from the FED through bond purchases to loan to Greece through currency swap and other derivative deals.

 In addition, The ECB and other created entities iniated similar programs as the FED by the creation and bank purchase of bonds from Greek , and other soveriegn) banks to "bail out" banks and create austerity for  citizens to help pay the loans. This seets to have even more than a tertiary affect from creatine currency, even though Greece can not create its own currency.

MMT is a theory of money and how it works; it does not contain moral hazzard until you look at the the effects of money creation on countries

Thu, 03/01/2012 - 12:41 | 2212968 Vinz Klortho
Vinz Klortho's picture

MMT works fine as a monetary system, with one fairly severe and extreme constraint:

The immediate execution by half-hanging, disemboweling and drawing and quartering of any elected official, government, Federal Reserve or banking/credit system employee that causes, enables, authorizes or in any way otherwise facilitates the spending of money in excess of the productive capacity of the economy.

Put that into legislation, and I'm good to go.

Let's gut Maxine Waters and Nancy Pelosi as an example to get started.

Vinz Klortho

Thu, 03/01/2012 - 12:42 | 2212973 Vinz Klortho
Vinz Klortho's picture

If you want to discredit MMT, at least pick the weakest point for your attack.

The soft white underbelly of MMT is to be found in it's political assumptions, not in the economic theory.

Vinz Klortho

Thu, 03/01/2012 - 12:50 | 2213004 Vinz Klortho
Vinz Klortho's picture

MMT will only realistically work in a system with a much smaller government, and hence is reasonably compatible with Austrians, Ron Paul, gold standard folks, and true conservatives.  Here's why:

1) Money is power

2) MMT gives the government the ability to create large amounts of money

3) Corrupt individuals will get elected or work for companies to get control of that power.

4) If corrupt individuals or companies control the ability of the government to create large amounts of money, the MMT monetary system will fail.

Therefore, the only possible successful form of government operating under the MMT monetary system must be one that minimizes the amount of money the government creates, ie a government that is "small" relative to the productive capacity of the economy.

Vinz Klortho

Thu, 03/01/2012 - 14:08 | 2213346 TPC
TPC's picture

Hey Tyler and everyone else.  I've always told Tyler that I don't think we're very far apart in our thinking and I still think that.  As many of you know, MMR is a branch off of MMT due to some pretty serious disagreements over the importance of the government's role in the economy, production, etc.  We're finding that many Austrians are sympathetic to our ideas.  John Carney, Austrian of CNBC fame, has been working with us on some of the concepts we're working on.  Anyhow, I think you guys would find our perspectives more realistic than you might presume.  Feel free to come over to the site and pick our brains on stuff.  We're not trying to shun any perspectives.  

http://monetaryrealism.com/sample-page/

Tyler, I'd definitely be interested in your thoughts at some point.  I think there's more compatibility here than we might initially presume.  You know where to reach me.  

Best,

Cullen

Thu, 03/01/2012 - 16:04 | 2213941 covert
Thu, 03/01/2012 - 16:05 | 2213958 halfacanuck
halfacanuck's picture

"While hardly needing a full-on onslaught by an Austrian thinker, when even some fairly simplistic reductio ad abusrdum thought experiments should suffice (boosting global GDP by a few million percent simply by building a death starcomes to mind)"

Sure -- in the same way that a reductio ad absurdum argument can "crucify" the Austrian/libertarian approach by positing no government at all: not for national defense, not for infrastructure, not for environmental protection, not for unemployment benefits, pensions, education, policing or the judicial system -- and, of course, certainly not for countercyclical economic policy. Since only those entirely ignorant of history would claim a total absence of government to be a good idea, I think you might need to work a little on your Death Star argument, as cute as it may be. For a start, I would recommend Steven Pinker's excellent new book, Better Angels of Our Nature: Why Violence Has Declined.

"Among its supposed ‘breakthroughs’ is the truism that a government which issues its own fiat currency can never go bankrupt—at least in an accounting sense—and so should never shrink from commandeering ever more resources from its subjects"

Nonsense. What MMTers are trying to demonstrate is that solvency is never an issue for a monetarily sovereign nation. That is absolutely not the same thing as saying a govt "should never shrink" from spending more. Corrigan is being highly disingenuous.

"On this reckoning, the Greeks, far from being the most fiscally benighted and sorely afflicted of peoples, should rejoice in the effulgence of their status as beacons of true MMT enlightenment and prosperity!"

Having just stated that MMT applies to nations which issue their own currency, Corrigan then tries to "crucify" it by referencing a nation which uses a foreign currency -- the euro. Is this ignorance or dishonesty? You decide. The problem in Greece is over-borrowing. Monetarily sovereign nations do not need to borrow their own currency for the same reason an alchemist does not need to borrow gold.

"Absent the predations of the Provider State, individuals may [...] engage in saving [...] by acquiring claims on entrepreneurial endeavours, these latter being happy to put the funds so raised [...] to a hopefully profitable, productive use."

Correct. This is one area where MMT is weakest, IMO, but MMR (mentioned by Cullen Roche above) is attempting to fill in the gaps.

"As part of their insidious idea that no government can be too big, no deficit too wide"

More nonsense. No-one who understood the basic principles of MMT would ever say this, because it simply isn't true!

"Just look at the evidence. [T]he central bank expansion programmes at just six prime exemplars have seen their combined balance sheets doubling in the past four years, with more than half that expansion coming since the first emergency injections began in earnest, in early 2009. [...] Money supply has risen by a not incomparable amount"

Really? The money supply has doubled in four years? Let's check that claim for the US:

M2 money stock at the beginning of 2008 = $7.5T

M2 money stock at the beginning of 2012 = $9.5T

Claimed increase = "not incomparable" to 100%

Actual increase = 27%

"[B]ut the MMTers seem to be even more precariously balanced [...], with one foot planted firmly in a land where live those who believe that money can be effective in reigniting a temporarily slackened desire to spend, but with the other dangling in mid-air, well short of [...] those who take this to the logical conclusion that too much money can likewise easily lead to far too much spending, [...] and into the fire of inflation."

And we progress from nonsense to utter hogwash. An MMTer (or Keynesian, for that matter) would say that demand-pull inflation is not a concern while a large output gap remains. *Of course* it's possible to have too much money and too much spending! Who has ever claimed otherwise? The point is that additional demand when un- and underemployment are at record highs will result in... less un- and underemployment. Additional demand when the economy is at full capacity will result in inflation. MMTers do not hesitate to point this out, as Corrigan would know if he took the time to do some research on the subject he's attempting to address.

Corrigan uses words that might impress a high-school English teacher who doesn't see beauty in simplicity. Shame about the gross misrepresentations and outright factual errors those words convey, though.

Thu, 03/01/2012 - 23:39 | 2215742 salsabob
salsabob's picture

 

It appears that the primary author believes substituting facts and reason with verbiage and snark is the means for winning an argument.  That's up to each reader to decide for themselves.

For me, it was hard to read past the Harry Gunnison Brown quote regarding ineffectual/harmfulness of monetary policy when anyone with only a cursory knowledge of MMT recognizes that school's lack of any enthusiasm for those tools; MMT is about fiscal policy that includes BOTH federal deficit spending AND taxing to manage BOTH inflationary and deflationary tendencies. Ben don't play dat game.

I did carry on, however, until, once again, reaching the Austrian anachronism of Fed and bank balance sheets, un- utilitized in the actual economy, as their penultimate indicator of inflation.

As usual, just a weird, old, and unuseful way of looking at the world.  I had to stop.

 


 

Do NOT follow this link or you will be banned from the site!