Modern Monetary Theory

[Caseynotes]

'Everything you wanted to know about MMT but were afraid to ask'.

Detailed but not too hard to follow article including a collection of different media from the last few years by different MMT experts to help explain MMT.

Suggest to start with the video  “Does Modern Monetary Theory make sense? (half way down page) before digging into the text.

https://www.themacrotourist.com/posts/2019/01/23/mmt/

 

 

 

[Caseynotes]

Concise breakdown from Joe Weisenthal on Modern Monetary Theory.

[Caseynotes]

Part 1 of 2 of a followup to the OP in this thread is a must read. Why are all the classical economists unable to explain the current global economic situation? The Permabears have been waiting years for the sky to fall and still nothing. How come Japan's massive debt load hasn't sunk their economy? And where is all the **** INFLATION? 

https://www.themacrotourist.com/posts/2019/04/23/mmt1/   

PRACTITIONER'S GUIDE TO MMT: PART 1

[Caseynotes]

Following the last post now Part 2 of 2 on Modern Monetary Theory and it's inevitable rise in modern economics. Bonds, yields, assets and growth vs value.

https://www.themacrotourist.com/posts/2019/04/24/mmt2/

[Caseynotes]

Interesting look at MMT and the predictable impact on bonds, stocks and real estate.

https://www.cobdencentre.org/2019/05/debasing-the-baseless-modern-monetary-theory/

[Caseynotes]

Interesting podcast on the new EU top job appointees and what that will probably mean for the ECB and central banks, (less independence and more MMT and OMT) lining up with Trumps recent nominations for Fed positions and following Japan towards negative interest rates. Talks gold, yields, assets and more.

Included in this thread because of the underlying MMT theme.

16 min.

 

[Caseynotes]

Excellent video on the development and essence of MMT in this interview with Warren Mosler, reposted from another thread.

 

[Caseynotes]

MMT is coming, the US dollar is here to stay, and “value” investing is dead: an interview with Dylan Grice

By: John Stepek07/11/2019

https://moneyweek.com/517760/mmt-is-coming-the-us-dollar-is-here-to-stay-and-value-investing-is-dead-an-interview-with-dylan-grice/

[Caseynotes]

Some interesting long term charts on interest rates (just the last 700 years 🙂) and bond yields showing how the world of economics is changing over the long term.

Fed economists admitting they don't really understand why inflation has remained so low may point to a need to update their economic models.

https://www.visualcapitalist.com/700-year-decline-of-interest-rates/

 

[dmedin]

What's this, Reuters talking down big stock market gains because Trump is boasting about them?

While pensions and retirement funds were lifted by the rise in stock markets, the president has avoided talking about one key point about who really benefits when the market rallies: Most of the gains go to the small portion of Americans who are already rich.

That’s because 84% of stocks owned by U.S. households are held by the wealthiest 10% of Americans, according to an analysis of 2016 Federal Reserve data by Edward Wolff, an economics professor at New York University. So when the stock market has a blockbuster year - such as the nearly 30% rise in the S&P 500 benchmark index in 2019 - the payoff primarily goes to people who are already rich.

https://uk.reuters.com/article/uk-usa-trump-speech-stocks-analysis/trump-touts-stock-markets-record-run-but-who-benefits-idUKKBN1ZZ1AT

[Bopperz]

The more I look at MMT, the more it looks like Keynesian economics.

[Caseynotes]

 

16 minutes ago, Bopperz said:

The more I look at MMT, the more it looks like Keynesian economics.

I see the OP link has moved, here is the new link;

Everything You Wanted to Know about MMT (but were afraid to ask);

https://themacrotourist.com/2019-01-23-mmt/

"Yet isn’t that just Keynes theory? Yeah, trying to wrap my head around the difference between Keynes and MMT took me a while, but I think I got it.

Keynesians are still tied to the idea that we are bound by fiscal constraints whereas MMT’ers believe that the only real restraint is inflation."

 

[dmedin]

18 minutes ago, Bopperz said:

The more I look at MMT, the more it looks like Keynesian economics.

 

To me it looks like 'socialism for the rich', while the people get austerity the markets get unlimited amounts of free cash created out of thin air.  🧐

[Caseynotes]

8 minutes ago, dmedin said:

 

To me it looks like 'socialism for the rich', while the people get austerity the markets get unlimited amounts of free cash created out of thin air.  🧐

After leaving the Gold Standard there was felt the need to attach paper money to something even if that something was itself. It should instead be attached to people and infrastructure and their ability to produce wealth. Printed money can facilitate that, in fact always has done before MMT (see video above MMT 'how does it work'). Printing too much will trigger inflation so inflation data is used to regulate printing.

[dmedin]

Not sure if this is relevant to this particular thread but it's very funny, 'The ultimate goal is to sell the most sophisticated product to the least sophisticated client.' 

 

[Caseynotes]

Last year MoneyWeek magazine surveyed a panel of economists 50% of whom believed some form of MMT would be implemented in the UK in the near future, that was before the coronavirus economic crisis. A form of MMT is now a certainty.

MMT basically states that a govt can print money to finance projects that will contribute to growth and increased tax revenue so long as inflation is kept under control.

Many govts are already do this or something similar, print to lend to itself at near zero interest, or print to buy back it's own bonds.

To condense this thread a bit I've selected to 2 links that best describe MMT to those new to the subject. Critics of MMT mistakenly think it's just about printing and handing out free money and indeed many on the left have jumped on board thinking just that but it's not really the case, the original architects of MMT all have a traditional economics based background.

The first link is to a video interview with Stephanie Kelton for a brief description of MMT.

https://www.cnbc.com/video/2019/03/01/stephanie-kelton-explains-modern-monetary-theory.html

The second link is the video interview with Warren Mosler who was one of the first to develop MMT theory which he developed over his career starting as a money manager for large US financial institutions in the 70s. He talks about how he learnt just how the Fed actually worked and their working relationship to the major banks.

 

 

 

[dmedin]

2 hours ago, Caseynotes said:

so long as inflation is kept under control.

What this means in practice is that wages have to continue to be repressed, instead consumers will take on more and more debt and renounce the idea of ownership (they will be perpetual renters).

[dmedin]

Basically - read one of these books like 'The New Market Wizards'.  All fund managers are full of BS, most of them get lucky and quit while they're still ahead, and if they are dumb enough to keep playing the game too long they eventually lose money.  Some of them can even get it wrong everytime and still get prime time in the MSM - look up James Cramer on Wikipedia.

If an 'idea' comes out of one of these tools' brains that should automatically make you scream 'BULLSH!T'!

[dmedin]

Read 'The Intelligent Investor' - bombastic stilted b*llocks that essentially says, 'Prices go up and down and we can't predict them.'

So there you have it, the best investing wisdom on the market

[Caseynotes]

Julian Brigden @JulianMI2

11h

"Another Rubicon was crossed today, with the BoE announcing MMT or to use a less polite term monetary debt debasement. Essentially, the same is happening here in US. Thus we pivot to a general inflection point in macro with utterly profound implications!"

https://www.ft.com/content/664c575b-0f54-44e5-ab78-2fd30ef213cb

[dmedin]

Is the FT worth paying for?