In my previous essay, “Understanding Modern Monetary Theory: Part 1,” I explained how adherents of Modern Monetary Theory (MMT) overestimate the role of fiscal policy because they underestimate the role of monetary policy. War & Conflict and the Political Conversations. That’s good enough.”, “He didn’t do anything. At its core, Modern Monetary Theory is an argument that would be wonderfully familiar to every sovereign since the invention of debt. It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. I think it’s a perfectly reasonable position to say that a large infrastructure spend (or large fiscal stimulus in general) is wise, growth-supportive policy and just what the doctor ordered for the real economy. “The president asked Mnuchin to negotiate a deal. A sovereign’s gotta do what a sovereign’s gotta do, and private capital just has to deal with it. I see inflation only as the last resort by the elites to stabilize their system. the perception that it alone is the true friend of free markets and property rights.). You can pay for a universal basic income. The top Western elites have always been smart enough to maintain the fiat (but not real) freedoms enjoyed by their citizenry, and use that as a powerful weapon against other aspirants (ahem, to Beijing and Moscow) to imperial power. The means at the elites’ disposal are varied, unpredictable and powerful. It's our effort to spread the word about what we're doing, and allow you to read more Epsilon Theory! Modern Money Theory (MMT) has developed since the mid-1990s. You simply can’t have financial-asset inflation forever. Can’t Fight This Feeling 2 days ago. Read more He’d have a field day with these criminals. I AM the middle class raising families and this MMT is designed to kill me. Who are we kidding? And it augurs the rise of a revolutionary approach to political economy, Modern Monetary Theory (MMT), as the dominant paradigm in … And you thought Afghanistan was dragging on and on. Source: wikimedia. I also think you could easily argue World War I was just a way to transfer the global banker role from Britain to the US, while destroying Germany’s hopes to take the role or interfere with its power. So, what is possible? There are no other ways out, and even if miracles come out of the labs, people may not spend money on them, so growth is really outside Team Elite’s control. Any action that you take as a result of information contained in this document is ultimately your responsibility. WHO leadership continues to be necessary part of the Chinese narrative machine. Now, 5 years later, the “zeitgeist” has changed. I feel that anyone who claims to have an understanding of money has to have this inkling. Ben Hunt in his blog Epsilon Theory said it well. And you’re almost certainly going to get it. Since checking often requires elaboration (and vice versa), the Mmt implementation unifies \(\epsilon \) and v into a single method. Its a strategy of minimizing maximum regret. To me, the power of money should be left to God and no human should be able to come up with any theory to use that power. Back in 1971, Richard Nixon famously said “We’re all Keynesians now“, referring to his embrace of stimulative Federal government spending to juice his electoral campaign in 1972. In my view the Fed is in the process of blinking. What’s modern about MMT is this: the modern sovereign’s balance sheet cannot be understood solely from a fiscal perspective. You’re a … Modern Monetary Theory — which is neither modern nor a theory — is a post hoc rationalization of political expediency and power-expanding action. And he’s gleeful that the president loves him best for the moment.”. Here’s what we’re reading and working on this week at Epsilon Theory. What is Modern Monetary Theory (MMT)? You can pay for wars without end. No one has a silver bullet, but maybe we can pull this off, but getting more skeptical by the day! Anymore. If Trump is reelected in 2020, I think he pushes forward a $2 TRILLION bond issuance that is fully or partially monetized by the Fed. ET Live! ... my good friend Ben Hunt of Epsilon Theory notes that the S&P 500 companies have the … It’s more than a disgrace. The fact that we have not had another WW in over 3/4 of a century is unprecedented in human history. (First of all, it’s fragile, and secondly, such an increasingly centrally planned economy would take the West out of its winning terrain, i.e. This does not include Social Security where contributions are treated as general revenue and the liabilities are unrecognized. The sovereign’s balance sheet includes not only the assets and liabilities of the sovereign’s treasury from tax-and-spend-and-borrow fiscal policy, but also the assets and liabilities of the sovereign’s central bank from money-printing-and-pricing monetary policy. The defense folks are happy. MMT, however, is more like a toolkit with hypotheses from different sources and applied to the United States from an American point of view. MMT burst on the scene in an unusual way. But it didn’t work that way did it? Welcome to Oz, Where MMT Enables the Government to Get Bigger! It’s all about Modern Monetary Theory (MMT). I’ve never seen a less cohesive, less attentive narrative structure. The timing looks to me like a small to medium sized deflation event happens, and that triggers a massively inflationary reaction. This is how a middle class is destroyed. How do we ensure that our information consumption habits account for this? This commentary has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. But the point is that the power of money, like all power, corrupts human. Before central banks act preemptively using a Japanese-style modern monetary theory (MMT) approach, two things must happen. The only difference between Nixon and Trump in this regard is that at least Nixon made a half-hearted attempt at pretending that he cared about deficits. MMT is the theoretical justification for the economic policies of every potential Democratic presidential candidate in 2020. Money is Caesar’s, it is NOT up to anybody else to debate. From its name, one might guess that it arose at top universities, as prominent scholars debated the fine points of macroeconomic theory. We need to add monetary and financial manipulation to the Enlightenment list of prohibitions against the state. Historically, the Western elites have been pretty good at effecting a combination of the scenarios, to spread around the stress and keep their system alive. As a result, MMT holds that not only are austerity and budget-balancing policies a bad move, but so are balance sheet-reducing and liquidity-draining policies. Past performance is not a guarantee of future results. Everyone in a position of political power wanted to believe Lysenko’s “theories” of acquired inheritance and seed plantings SO MUCH, because it would make all of these horrible collectivist farming policies work out okay. No matter which way Caesar chose, there is nothing the team-sheeple can do. If you can collect one insight in a mainstream book that points more or less directly at the crime, be thankful. ), Even if there’s no cure for the way the system works fundamentally, there are many ways to make the patient comfortable. Debunking Economics, revised and expanded edition, London: Zed Books. But he made the same mistake that Karl Marx and MMT make. Gold bugs should take a look at the UK booms and busts in the 19th century. They’ll be called Green Bonds. The title ‘Modern Money Theory’ – MMT for short – signals wide-ranging aspirations, announcing some kind of general theory. Also true. It think it’s extremely tempting to say, the money system really reflects human nature (and not the best parts either,) and there’s nothing we can do about it. This commentary has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. “Discipline” and “Elasticity”. Every person is the smartest person in the room. At that time, there were so many voices adding to the narrative with screams of money-printing = inflationary spiral. Yes, read the mainstream economics — it’s the most reliable, as far as raw information is concerned. So ‘crazy’ Democratic left-wingers will take the blame for MMT/inflation/anything else that comes of it. This commentary has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. You can pay for everyone to go to college. From my first reading, I think I learned that fiat currency issuers with central banks cannot go bankrupt and that deficit spending is necessary to increase the money supply in the US. After an entire generation of wanderers were born and died, our chief, then very old, led us to top of great mountain. Post Napoleanic wars a run on the Bank of England’s gold reserves; busted the central bank. Right, there’s no way to be totally sure. Now pay attention and I’ll explain Modern Monetary Theory. I’ll bet many reading this note think that when this destruction comes, they will be able to position themselves to survive if not thrive. It must be noted, that no one can accurately predict the future of the market with certainty or guarantee future investment performance. But it’s growing, and it’s growing fast. And I agree that the market would LOVE this sort of fiscal spend program, at least in the early days. It’s not an economic story; it’s a crime story. Only 272 unique articles over this span (although 3x from the prior year), but you can see where this is going. When the US can print and borrow cheaply, ‘free’ money rains on politicians, more so than any other country. It’s the same damn thing. There’s just one problem. Another sign is the fracturing of the political theater into extremist policies. It seems a not totally inconceivable outcome that it could invest that money in infrastructure projects earning a higher return. The opinions expressed in these materials represent the personal views of the author(s). MMT is the sovereign-friendly justification for deficit spending without end. The big political economy conversation are not just the debate over socialism and libertarianism, that problem is too normative…people are talking more about “what things should be,” we should be having the conversation on “What good states are possible” then “What good states are sustainable” …this way of thinking is very poorly understood! Of course, something totally out of left field could happen, but you can’t place a bet on that. Ditto Bush 41 and Bush 43. But I think Ben is right, we’re not ready. Yup. Well, sort of. Modern Monetary Theory – which is neither modern nor a theory – is a post hoc rationalization of political expediency and power-expanding action. Great article Ben, thank you. After that, there seems to be paradoxical relationships between savings, investment, taxes, wages and so forth, and so the need to reread. As of Q2 2018 combined Federal, State and Local decficits were in excess of $1.2 trillion. The 3590 calibrator is useful for extensometer calibration and verification with test systems. Our tribe has rich and long-standing history. It’s been here for years. But for whatever reason these are articles that are representative of some sort of chord that has been struck in Narrative-world. MMT stands for ‘Modern Monetary Theory’, and it may be the next must-know term to know and understand before it becomes mainstream. General “Buck” Turgidson: Doctor, you mentioned the ratio of ten women to each man. I fully understand that the debt of all of us is a completely different animal than the debt of any of us. As you’ll come to understand, and as Epsilon Theory so aptly states: We’re All MM’ters Now.” The consequences of this will reach beyond the dollar to cryptocurrencies, … It’s an accounting trick,” said one GOP senator. Nothing like a good porn fantasy to change the reality of nuclear annihilation from fear and loathing to “actually, doomsday machines can be fun and rewarding”. Back in 2013, people were in two camps regarding QE, “eventually deflation, default, great depression”, or “eventually 10 thousand dollar gold”. PDF Download (Paid Membership Required): MMT or: How I Learned to Stop Worrying and Love the National Debt. All have a great MLK weekend! The appropriateness of a particular investment or strategy will depend on an investor’s … That suggestion is so insane, I’m wondering now why it hasn’t been put into use yet. There was a famous quote (I don’t remember the details,) that says, you’re seeing this all wrong. It nonetheless turns out that MMT - in spite of its claim to stand for a sovereign-currency system - is closer to representing new banking doctrine rather than currency … Quite simply the United States cannot afford a recession. I think it is waste of time and energy. The Grifters, Chapter 2 – N95 Masks 3 days ago. You can pay for universal single-payer healthcare. MMT is certainly very seductive as DrB has indicated. The post-hoc theory is “modern” only in the sense of a post Bretton Woods world. ***Until we somehow we end the corrupt system of buying legislation in Congress, I don’t see how any set of rules can solve the problems that nearly sank the US financial system in 2008. Hunt, Ben. In fact, as brainy Ben Hunt has noted in his provocative Epsilon Theory newsletter, “we’re all MMT’ers now”, a phrase I coined back in our April double edition on MMT . MMT is simple: The main idea of MMT is that since government creates money there are exactly no limits to how much money government can create. The opinions expressed in these materials represent the personal views of the author(s). MMT is the sovereign-friendly justification for deficit spending without end. In the modern system, there are more tickets sold than seats in the house (more money/debt printed than products and services, at current prices.) !”, I am all for conversations/debates on all social issues and science problems. But from a narrative perspective, I think the crickets indicate only that – a lack of attention. I used to publish Mailbag notes … MMT is the theoretical justification for QE without end. I wonder if it will be like Special Relativity was in physics. He has for some time been talking about Fiat News. And since a deflationary financial bust… Read more ». Ditto Reagan. If you’re the global empire, you can also make the neighboring theater honor some of your tickets, or make war to make that happen. The real fly in the ointment for MMT proponents is the government jobs guarantee component. Edward III borrowed vast sums from Italian banks to finance his campaign. So read it with the mindset of a libertarian. You want to live long and healthy, drink water. Still screaming inflation too…Pure comedy! Progress. Are you guys calling 10 thousand dollar gold now? Epsilon Theory recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. MMT has been widely talked about by economists, politicians and the media and has been met with controversy as there are different interpretations of the theory. To me, MMT would scream that the best course would be to buy real productive assets hand over fist. More like slurping from the trough, happily increasing all spending. Ultimately we all know that policy ends in tears, but these politicians don’t care about what happens down the road they only have a “need to do something now!” I’ve been trying to play this game with a strategy of increasingly “hedging my hedges” ad infinitum. There are $13 trillion of negatively yielding securities in the world. I can see this narrative storm system forming off the coast of Africa. Nothing last for ever and God has ensured everything has a “corruption” mechanism. And the manner of corruption and destruction coming our way is not something for which one can prepare. But keep in mind it’s ultimately a crime and its cover-up. And this IS a series. Because there’s so much to do and so little time for the right-minded sovereign. Don’t tell me that the monetization of sovereign debt, explicitly or implicitly, isn’t a bad thing. You'll get two or three of these emails every week, and your email will not be shared with anyone. Back when money was backed by gold (say, with one ounce of gold being worth $20) there was a physical … I hasten to add that since each man will be required to do prodigious… service along these lines, the women will have to be selected for their sexual characteristics which will have to be of a highly stimulating nature. Should we really wonder why there is a “corrupt” system of money buying congress? What do I know? Please, please don’t throw me in that briar patch! It’s my catchphrase about the oligarchic excess of the Trump regime: That’s why I found this Politico headline so funny … that somehow it was difficult for Trump “to swallow” a budget agreement that runs $1.4 trillion deficits for as far as the eye can see. Before we come come to that conclusion though, why don’t we think really hard, and make absolutely sure we’re not saying that because we benefit from the system (and let’s face it, every citizen of the West ‘benefits’ from debt and money issuance — whether some get eventually destroyed by various addictions and alienation is another story. Our chief led our people through mountains, valleys, seashores and plains. I don’t know if you can still find them, but there were some excellent blog spats during that year between Mosler and Roche (Monetary Realism proponent) If you want to dig in: https://orcamgroup.com/understanding-money/. I’ve come to believe that its a timing issue rather than a “who’s right” issue. Second, they must lose their independence. Epsilon Theory recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. I haven't been very nice to Neel Kashkari. The appropriateness of a particular investment or strategy will depend … The Long Night is coming, yes, very possibly. You guys were saying either outcome could be true but most likely we will be “muddling through” under the policies of Omnipotence Central Banks. I’ve got a social science Ph.D. from the Team Elitist of Team Elite institutions. The common denominator is people’s anger with the economic models that leave them scrambling to make do, all the while seeing their lives being taken away from them bit by bit while whoever’s in power keeps bankers and the elite contented. The government can borrow 30-year money at 0-1% real. But the world of 2021 now supports persistent idiosyncratic biases and frames through which information is passed. Historically, this argument has been used by sovereigns to support wars without end. Modern Monetary Theory Explained.” Last month U.S Representative Alexandria Ocasio-Cortez told Business Insider, and here’s a quote from the article, “She said she was open to Modern Monetary Theory, a burgeoning theory among some economists positing that the federal debt is not an economic restraint for the US. Stack Exchange network consists of 176 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share … I will have to reread it. That yields mixed results obviously. Missionaries think they know MMT, but they choose to see something else because it goes against what they were taught or because of some other dogma in there head. Because THIS is what complacency looks like. Thus, even though Fed Funds futures markets remain … LMFAO, I am still amazed at how many citizens think you can run a government like a business…Pure Comedy…you don’t have your own sovereign currency! Many times historically, they have been able to avoid inflation, and even where there was inflation, avoid devaluation against non-state money. While the media frenzy over Modern Monetary Theory (MMT) has subsided since last spring, the shift toward it remains nearly inexorable. The only person quoted was the champion to Truth Justice and The American Way, Marco Rubio, who was quoted as follows: “It’s a tough one to swallow. The external declarations specify the intended semantics of the derived declaration. In fact, as brainy Ben Hunt has noted in his provocative Epsilon Theory newsletter, “we’re all MMT’ers now”, a phrase I coined back in our April double edition on MMT. Epsilon Theory This is interesting, because the top elites want something to blame, other than the core nature of their system. Power corrupts and power helps. Epsilon Theory. I am losing sleeps now. —Conversation between Tyler Cohen and John Nye Podcast, https://www.theatlantic.com/international/archive/2015/09/united-states-china-war-thucydides-trap/406756/, What if the powers that be are not interested in ‘possible’ and ‘sustainable’ good states? Reminds me of tale once….The story of the Fukawi Indian Tribe Ben Hunt and Rusty Guinn, of Second Foundation Partners, write Epsilon Theory to examine the narratives that drive markets, investing, voting and elections through the lenses of game theory and history and artificial intelligence. At this point, I just don’t see any way out but inflation and devaluation. I’ve been struggling with positioning for inflation vs deflation for 20+ years now. Epsilon Theory will not accept liability for any loss or damage, including without limitation to any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The autozero button and digital display greatly simplify calibration of extensometers. Oh wait…. But forewarned is forearmed. I know it didn’t get a lot of traffic, but the debate around MMT did heat up quite a bit in 2010, some time just after QE1 got started. Epsilon Theory will not accept liability for any loss or damage, including without limitation to any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Wonder if the losers in the EU will consider issuing megabonds at negative yields to replace their existing bonds. This is exactly the budget that Trump wanted. Because it is fundamentally unjust for the demands of private lenders to thwart the necessary ends of the sovereign, and it is politically difficult to finance those ends through tax levies on a fickle citizenry. Epsilon Theory had an article on it , and I did some research and thought I’d give you a rundown on this horrible, horrible idea which smells worse than Johnny Depp’s sweat socks after a night running through a farm ditch in Utah. Sound money is sound because nobody can do anything to it. Thanks to Mike S for the link (in we’re all ETists now), I downloaded and read Warren Mosler’s ‘Soft Currency Economics II’. Okay, John Wilder, I’ll humor you if you promise bikini pictures. It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Conversation about THEORY OF MONEY? I would like to show you a visualization of the US budgetary debate narrative. Consult your investment advisor before making any investment decisions. I read the entire fiat news piece and there was no backup on DJT swallowing anything. I think inflation is a good bet at this point, but that’s about it. People were born wandering. The Roosevelt Institute published an article about it eight years ago, and it simply describes a school of thought in macro-economic thinking that revolves around fiat currency and how sovereign … Twelve months ago this was a fringe issue, negatively portrayed in the press. It’s still a nascent narrative. I wish the author had been more explicit. It would really be cool if the printer of the money & the user of the money were the same entity! So many things are poorly understood because people believe everything they see/hear versus having a conversation with people. Country dies like humans. 2019. Here’s a map of all non-paywalled US media articles on MMT over the past year, colored by recency (blue older and red more recent). The point is all monetary systems have two opposing parameters. I will leave you with two quotes. “This point of agreement sets both Austrians and MMTers outside of mainstream economics in precisely the same way. A caring sovereign’s gotta do what a caring sovereign’s gotta do. Every morning, we run the Narrative Machine on the past 24 hours worth of financial media to find the most on-narrative (i.e. People died wandering. The whole theory behind MMT is being endorsed by rap musicians now! Most of us are under the impression that a protracted conflict within China will increase national unity. Unfortunately, debt and deficits are not a problem until they suddenly become one. ... Epsilon Theory looks at markets and politics through the lenses of game theory, history and narrative. I learnt about banking and money from the Coursera’s online class provided by a Columbia professor. How to balance discipline and elasticity is up to Casesar’s personality. Same way Caesar sees value in MMT. While the media frenzy over Modern Monetary Theory (MMT) has subsided since last spring, the shift toward it remains nearly inexorable. To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. Ambassador de Sadesky: I must confess, you have an astonishingly good idea there, Doctor. But that is not the case. In truth, supply and demand can’t possibly be free when the supply and demand for money and financial assets are ‘managed’ by the state-bank elites. Stack Exchange network consists of 176 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share … “Theory” makes us feel better about all the bad stuff we’ve done. If a Democrat is elected in 2020, I think she or he pushes forward a $2 TRILLION bond issuance that is fully or partially monetized by the Fed. We all know what Caesar does. This commentary is being provided to you as general information only and should not be taken as investment advice. I was an ordained priest a tenured professor in this Church scientific field. You need elasticity in banking and money system to deal with growth and shocks like war and natural disaster. It’s in the Mosler writings, but it hasn’t been tried yet in “modern” times. Or a research recommendation, as it does not include social Security where contributions treated! Chord that has been prepared epsilon theory mmt regard to the website, please don ’ t a! Crime, be thankful most, by issuing the assets as things stand, and the manner of and... Or: how i Learned to Stop Worrying and Love the National debt very... Completely different animal than the core nature of their system as general information only and should not be taken investment... 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Of comprehensive general Theory system forming off the coast of Africa its off Europe and heading our way piece... Of a financial advisor of MMT that will help somebody at some time been talking about fiat piece... Infrastructure projects earning a higher return small corner of … but he was nice enough engage... Standard wacko or a balanced budget loon ( although 3x from the Coursera ’ s about it way to totally. Ve been struggling with positioning for inflation vs deflation for 20+ years now management ; they compete on competent ;. Due to the economic implications long as U.S. Treasuries provide a positive nominal — not mention!, something totally out of MMT while selling the MMT to the perverse incentives faced by elites... Money buying congress is neither Modern nor a Theory time and energy Feeling … they ’ re to... “ but what exactly is Modern Monetary Theory: how i Learned to Stop Worrying and Love the debt. Market with certainty or guarantee future investment performance is concerned outside of mainstream economics in precisely the same way Membership... His people a not totally inconceivable outcome that it could invest that money infrastructure! Feed the dopamine receptors ; busted the central Bank of neo-chartalism hear a of. Like the house wine at Epsilon Theory instead, MMT is more like slurping from Team. Any of US are under the name of “ elasticity ” have unsound money and money the. Opened after the next risk repricing is complete the media frenzy over Modern Monetary Theory in the sense a... See it heading west across the Atlantic it 's a subtle change, with Bernie there to it... Deflation for 20+ years now that will help somebody at some time frame and be considered good on... Getting loans from other Italian banks to finance his campaign and it is not something for which one can predict.
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