@blitzdude said:
While you were sleeping......yawn
$26T Semper Fi!
Takes a lot of money to keep propping up your gains in real estate...
Ha
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@blitzdude said:
While you were sleeping......yawn
$26T Semper Fi!
Takes a lot of money to keep propping up your gains in real estate...
No real estate gains here although I am perfectly content (and almost completely self sufficient) on my farm.
Self sufficient after the massive taxpayer subsidies or do you actually pay your fair share?
I certainly pay more tax than those running our country. Another 5 days another $135B in the hole. At this rate 'Merica will be bankrupt faster than an Atlantic City casino. Yawn.
If Modern Monetary Theory purports that the U.S. can simply print money to finance all to a fare-thee-well, what's the point of collecting any sort of federal taxes?
If Modern Monetary Theory purports that the U.S. can simply print money to finance all to a fare-thee-well, what's the point of collecting any sort of federal taxes?
MMT is literally the MAGIC MONEY TREE. Based on the recent amount of $Trillions in new money, it is safe to say that MMT has been blessed and implemented. It is an experiment that could go horribly wrong.
Supporters of MMT argue that as long as a nation is borrowing its own currency it need not worry about the size of the debt but should worry about a rise in price inflation that can be managed by controlling demand. According to Paul Krugman, "“the budget deficit should be big enough to produce full employment, but not so big as to produce inflationary overheating”
MMT theory believes income tax is necessary because it can be throttled to offset demand. What this means is that the taxman will take more money whenever inflating the money supply results in price inflation and odds are the tax increases will not be temporary. So if MMT holds true and taxes can successfully be throttled to control price inflation, the consumer will instead be saddled with tax inflation. In the end MMT's new found unlimited method of money creation will result in less money in the consumer pocket whether it be a result of price inflation or tax inflation. The question of "is MMT good for the consumer" is also dependent upon where the new money is directed. Thus far it has been directed primarily at assets where the price inflation has had little affect on consumer goods. Remember, the Consumer Price Index (CPI) does not reflect financial asset inflation.
What happens when the government injects MMT's new money into things like infrastructure, an increase in entitlements or other programs that result in the money going directly to consumers who will spend it on their personal consumer needs? You guessed it; consumer goods price inflation. The end result will be the money printers putting new money in one of the consumer's pockets and taking more taxes from the other pocket. Like all other "modern monetary experiments/programs" the result will likely be a continued transfer of wealth from those who don't have so much to those that have too much. Keep in mind that in most cases a crisis must to be created to justify new money that continues to result in a massive transfer of wealth. This is how the rich get richer and the poor get poorer. MMT is just a new, improved way of keeping the game going; by removing debt worry constraints it pretty much removes the constraints on printing money.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Nice answer, derryb. I've wondered, does MMT care if the US loses its premier reserve currency status? (I don't see an immediate threat; current COFER ratios are the dollar at 61%, euro - 21%, the rest - 18%.) Who wants to hold dollars for payment when the US debt reaches $30T, $40T,....?
@renman95 said:
Nice answer, derryb. I've wondered, does MMT care if the US loses its premier reserve currency status? (I don't see an immediate threat; current COFER ratios are the dollar at 61%, euro - 21%, the rest - 18%.) Who wants to hold dollars for payment when the US debt reaches $30T, $40T,....?
I am assuming other countries will follow the us lead
@renman95 said:
I've wondered, does MMT care if the US loses its premier reserve currency status? (I don't see an immediate threat; current COFER ratios are the dollar at 61%, euro - 21%, the rest - 18%.) Who wants to hold dollars for payment when the US debt reaches $30T, $40T,....?
MMT is a "policy" that governments pursue individually. It is built on a theory that individual governments will hold their own debt at no actual dollar cost for that debt. As needs arise to create new money, outside holders of current debt (bonds) could be adversely affected as it makes their bonds less desirable to potential buyers, especially if inflation cannot be controlled. So, I imagine an intelligent, early MMT goal would be to create new money to pay/reduce/eliminate outstanding debt held by others. This would be the first potential inflationary hurdle and the first threat of a rise in taxes to control any resulting inflation. Current bond holders of sovereign debt should be concerned about the pursuit of MMT by any nation for which they hold bonds. Taxpayers within that nation should be concerned of any attempt to create an initial surge in new money to satisfy outstanding debt held by others.
The other option is for an MMT guided nation to ignore the consequences to outside bond holders short of defaulting on the debt, This would involve, rather than an all at once attempt to settle that debt, the gradual payment (with new money) of that debt as bonds become due which could turn these bonds into the equivalent of corporate junk bonds. MMT nations may choose to continue selling outside debt, but an MMT policy likely reduces the odds of finding outside buyers. MMT basically declares "there is no need for outside buyers."
Thus far all reserve currencies have had limited life spans. The US dollar has been slowly loosing its reserve status as other nations that trade with each other have in recent years found ways to avoid using the "third party" dollar for payments. Earlier attempts by smaller nations to "abandon" the dollar and bypass using it for non US transactions resulted in the "regime change" and the removal/death of its leadership (i.e. Libya who announced it's plans to use gold, and not dollars, to pay for it's oil purchases from its neighbors.) In recent years the US appears to be more "permissible" in the bypass efforts, largely because they are being made by nations too large to be bullied.
The primary need for the dollar to be the premier reserve currency is twofold: (1) it creates foreign demand for
dollars which creates foreign demand for US debt. (MMT removes this dependency on foreign US debt buyers) and (2) it creates a lot of US dollar liquidity (MMT can provide unlimited liquidity). So, theoretically, with MMT in full force, theoretically there would be no need for the dollar to be the premier, reserve currency of the world.
I suspect MMT would lessen the need for individual countries (that have their own central bank) to use dollars for their international purchases when most of these countries can join the MMT bandwagon and create unlimited amounts of the own currencies to be used for international trade. How countries in the Eurozone would take advantage of MMT remains unclear as they do not print their own individual currency they are not subject to consumer income tax by their master, the EU. However, the primary need for a reserve currency is to simplify and standardize the payment system used in international trade. For this reason, while I believe that the universal currency gold is best suited for the job, the next reserve currency will likely be a "basket" of international currencies. Such a creature is found in the SDR which has been on the discussion table for a few years now.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The U.S. has shortsightedly been over-using sanctions as a means of geopolitical impact. That certainly is accelerating the search for the international currency "basket" to replace the dollar as the reserve currency (although as you say, the shift is historically inevitable anyway. So I guess we're just making geopolitical hay while the sun shines.)
@Baley said:
Agree, great posts derryb, you're in the zone today. Gold is a great hedge against all this, we agree.
Too bad it will be followed up with some zerohedge conspiracy theory article about crimex manipulation and how all goldbugs about to become trillionaires. lol
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
That doesn't even account for the gazillions that Congress is "debating" right now (as if there was even any question about how much they intend to spend - money that they don't have and intend to punish us with by taxing us out the whazoo.)
First, they punish us with taxing & spending. Then, they print more imaginary casino money anyway. Why bother with the punitive taxation? Nice folks, those congress critters. May their karmas catch up with them as soon as possible.
Q: Are You Printing Money? Bernanke: Not Literally
@blitzdude said:
Happy $27T day, nobody even noticed. lol
Gutter Money?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@blitzdude said:
Happy $27T day, nobody even noticed. lol
Gutter Money?
I'd put cold hard cash is somewhere in the middle:
Gold
Hard Cash
Gutter Metal
As for the debt, up over $7T in less than the last 4 years. Impressive, Semper Fi!
Totally disagree. As you pointed out with the rapid increase in national debt, the quantity of cash is expanding at an exponential rate while silver is not.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Those who have been unsuccessful with silver fail to realize their success with dollars is even worse. Slow inflation puts a stealthy, hidden decline in dollar value.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@blitzdude said:
Happy $27T day, nobody even noticed. lol
Gutter Money?
I'd put cold hard cash is somewhere in the middle:
Gold
Hard Cash
Gutter Metal
As for the debt, up over $7T in less than the last 4 years. Impressive, Semper Fi!
Totally disagree. As you pointed out with the rapid increase in national debt, the quantity of cash is expanding at an exponential rate while silver is not.
I've bought everything I ever needed with cash, Even bout some farmland and a barn once with gold. Couldn't even trade gutter metal for rolls of toilet paper and lysol during the great pandemic of 2020. Just saying.
@derryb said:
Those who have been unsuccessful with silver fail to realize their success with dollars is even worse. Slow inflation puts a stealthy, hidden decline in dollar value.
Wow. Everyone must have been rich in 1913. It must have been a great time to be alive. Way better than now.
Comments
@taxmad said:
Ha
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
No real estate gains here although I am perfectly content (and almost completely self sufficient) on my farm.
The whole worlds off its rocker, buy Gold™.
Self sufficient after the massive taxpayer subsidies or do you actually pay your fair share?
2 coins.
time to cry.
I certainly pay more tax than those running our country. Another 5 days another $135B in the hole. At this rate 'Merica will be bankrupt faster than an Atlantic City casino. Yawn.
The whole worlds off its rocker, buy Gold™.
Serious question:
If Modern Monetary Theory purports that the U.S. can simply print money to finance all to a fare-thee-well, what's the point of collecting any sort of federal taxes?
Here's a warning parable for coin collectors...
we have to do what everyone else is doing.
right now, it is keeping up appearances.
MMT is literally the MAGIC MONEY TREE. Based on the recent amount of $Trillions in new money, it is safe to say that MMT has been blessed and implemented. It is an experiment that could go horribly wrong.
Supporters of MMT argue that as long as a nation is borrowing its own currency it need not worry about the size of the debt but should worry about a rise in price inflation that can be managed by controlling demand. According to Paul Krugman, "“the budget deficit should be big enough to produce full employment, but not so big as to produce inflationary overheating”
MMT theory believes income tax is necessary because it can be throttled to offset demand. What this means is that the taxman will take more money whenever inflating the money supply results in price inflation and odds are the tax increases will not be temporary. So if MMT holds true and taxes can successfully be throttled to control price inflation, the consumer will instead be saddled with tax inflation. In the end MMT's new found unlimited method of money creation will result in less money in the consumer pocket whether it be a result of price inflation or tax inflation. The question of "is MMT good for the consumer" is also dependent upon where the new money is directed. Thus far it has been directed primarily at assets where the price inflation has had little affect on consumer goods. Remember, the Consumer Price Index (CPI) does not reflect financial asset inflation.
What happens when the government injects MMT's new money into things like infrastructure, an increase in entitlements or other programs that result in the money going directly to consumers who will spend it on their personal consumer needs? You guessed it; consumer goods price inflation. The end result will be the money printers putting new money in one of the consumer's pockets and taking more taxes from the other pocket. Like all other "modern monetary experiments/programs" the result will likely be a continued transfer of wealth from those who don't have so much to those that have too much. Keep in mind that in most cases a crisis must to be created to justify new money that continues to result in a massive transfer of wealth. This is how the rich get richer and the poor get poorer. MMT is just a new, improved way of keeping the game going; by removing debt worry constraints it pretty much removes the constraints on printing money.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Nice answer, derryb. I've wondered, does MMT care if the US loses its premier reserve currency status? (I don't see an immediate threat; current COFER ratios are the dollar at 61%, euro - 21%, the rest - 18%.) Who wants to hold dollars for payment when the US debt reaches $30T, $40T,....?
Good synopsis derryb.
Knowledge is the enemy of fear
Personal consumption expenditures is the cpi replacement the fed uses
I am assuming other countries will follow the us lead
MMT is a "policy" that governments pursue individually. It is built on a theory that individual governments will hold their own debt at no actual dollar cost for that debt. As needs arise to create new money, outside holders of current debt (bonds) could be adversely affected as it makes their bonds less desirable to potential buyers, especially if inflation cannot be controlled. So, I imagine an intelligent, early MMT goal would be to create new money to pay/reduce/eliminate outstanding debt held by others. This would be the first potential inflationary hurdle and the first threat of a rise in taxes to control any resulting inflation. Current bond holders of sovereign debt should be concerned about the pursuit of MMT by any nation for which they hold bonds. Taxpayers within that nation should be concerned of any attempt to create an initial surge in new money to satisfy outstanding debt held by others.
The other option is for an MMT guided nation to ignore the consequences to outside bond holders short of defaulting on the debt, This would involve, rather than an all at once attempt to settle that debt, the gradual payment (with new money) of that debt as bonds become due which could turn these bonds into the equivalent of corporate junk bonds. MMT nations may choose to continue selling outside debt, but an MMT policy likely reduces the odds of finding outside buyers. MMT basically declares "there is no need for outside buyers."
Thus far all reserve currencies have had limited life spans. The US dollar has been slowly loosing its reserve status as other nations that trade with each other have in recent years found ways to avoid using the "third party" dollar for payments. Earlier attempts by smaller nations to "abandon" the dollar and bypass using it for non US transactions resulted in the "regime change" and the removal/death of its leadership (i.e. Libya who announced it's plans to use gold, and not dollars, to pay for it's oil purchases from its neighbors.) In recent years the US appears to be more "permissible" in the bypass efforts, largely because they are being made by nations too large to be bullied.
The primary need for the dollar to be the premier reserve currency is twofold: (1) it creates foreign demand for
dollars which creates foreign demand for US debt. (MMT removes this dependency on foreign US debt buyers) and (2) it creates a lot of US dollar liquidity (MMT can provide unlimited liquidity). So, theoretically, with MMT in full force, theoretically there would be no need for the dollar to be the premier, reserve currency of the world.
I suspect MMT would lessen the need for individual countries (that have their own central bank) to use dollars for their international purchases when most of these countries can join the MMT bandwagon and create unlimited amounts of the own currencies to be used for international trade. How countries in the Eurozone would take advantage of MMT remains unclear as they do not print their own individual currency they are not subject to consumer income tax by their master, the EU. However, the primary need for a reserve currency is to simplify and standardize the payment system used in international trade. For this reason, while I believe that the universal currency gold is best suited for the job, the next reserve currency will likely be a "basket" of international currencies. Such a creature is found in the SDR which has been on the discussion table for a few years now.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The U.S. has shortsightedly been over-using sanctions as a means of geopolitical impact. That certainly is accelerating the search for the international currency "basket" to replace the dollar as the reserve currency (although as you say, the shift is historically inevitable anyway. So I guess we're just making geopolitical hay while the sun shines.)
Thanks, derryb, for the thoughtful responses.
Here's a warning parable for coin collectors...
Agree, great posts derryb, you're in the zone today. Gold is a great hedge against all this, we agree.
Some even think that any quality asset is better than cash or near zero interest savings accounts:
Nice rental property and shares of successful business come to mind
The three together makes a fantastic tripod.
Liberty: Parent of Science & Industry
Too bad it will be followed up with some zerohedge conspiracy theory article about crimex manipulation and how all goldbugs about to become trillionaires. lol
The whole worlds off its rocker, buy Gold™.
Troll bait:
Turbulence Ahead
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Just like clockwork.
The whole worlds off its rocker, buy Gold™.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Let's try to depossit 2 at the fed
From the article:
Happy $27T day, nobody even noticed. lol
The whole worlds off its rocker, buy Gold™.
That doesn't even account for the gazillions that Congress is "debating" right now (as if there was even any question about how much they intend to spend - money that they don't have and intend to punish us with by taxing us out the whazoo.)
First, they punish us with taxing & spending. Then, they print more imaginary casino money anyway. Why bother with the punitive taxation? Nice folks, those congress critters. May their karmas catch up with them as soon as possible.
I knew it would happen.
Gutter Money?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I'd put cold hard cash is somewhere in the middle:
Gold
Hard Cash
Gutter Metal
As for the debt, up over $7T in less than the last 4 years. Impressive, Semper Fi!
The whole worlds off its rocker, buy Gold™.
Totally disagree. As you pointed out with the rapid increase in national debt, the quantity of cash is expanding at an exponential rate while silver is not.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Those who have been unsuccessful with silver fail to realize their success with dollars is even worse. Slow inflation puts a stealthy, hidden decline in dollar value.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I've bought everything I ever needed with cash, Even bout some farmland and a barn once with gold. Couldn't even trade gutter metal for rolls of toilet paper and lysol during the great pandemic of 2020. Just saying.
The whole worlds off its rocker, buy Gold™.
As for the debt, up over $7T in less than the last 4 years. Impressive, Semper Fi!
Just out of curiosity, how impressive do you think the debt load has to be, before people actually lose confidence in the currency?
I knew it would happen.
"The Simpsons" already did this one, though they chose the currency route.
Wow. Everyone must have been rich in 1913. It must have been a great time to be alive. Way better than now.