It didn't work for john Law in France with the Banque Générale Privée or the Mississippi Company, but people think that this time is different. Fiat always goes to ZERO.
It does seem clear that MMT is gaining ground, even if most mainstream politicians will still avoid the term for a while.
But, the experience of the past few years, especially 2020, and the experience of Japan, may make deficit hawks look like "boys who cried wolf". However, the fact that monetary expansion has yet to be severely inflationary is relatively easily explained (for example, in terms of globalization, demographics, and technology). The environment is changing, and the impact of the coming wave of monetary expansion will be different. Nobody should panic -- the world is not going to end and it will likely be prosperous for many -- but baby boomers, especially, should take steps to protect themselves. Anyone on a non-indexed fixed income or relying on a small pool of financial assets is in danger of getting crunched.
@Higashiyama said:
It does seem clear that MMT is gaining ground, even if most mainstream politicians will still avoid the term for a while.
Monetary policy since 2008 - print and spend now, worry later. It can't end until suddenly it does. What will make it end? The hyperinflation that it always delivers. So for now, sit back and continue to profit from the bubbles - you are going to need those profits when it ends.
What advice would you give to a middle class recently retired American? Assume that they are comparatively well off, but very little cushion - house paid off, no debt, a modest 401k, and social security.
Some obvious advice, though not necessarily easy to follow: stay healthy and expect to work part time indefinitely; if you have any tangible asset purchases in mind, do it sooner than later; possibly keep some money in very carefully selected equities; annually move a fixed percent of our assets to gold over some period, such as 5 years, until you are at 30 % gold? For a somewhat wealthier individual, perhaps a carefully vetted agricultural property.
We are not going to have hyperinflation in the sense of Weimar Germany or Zimbabwe, but it is hard to imagine that we won't return to double digits.
Double digit price inflation will decimate the lifestyle of most Americans, many of whom depend on ongoing credit. Wage increases always lag price increases. On the other hand it just might offer decent returns those who are saving. The savers of this country have been penalized by monetary policy since the ongoing financial crisis began in 2008.
@dpoole said:
MMT works as long as interest rates are low.
But not after that.
We're not only printing money but robbing the future in many ways. Every time the schools produce another class that can't read and write or have great difficulties mastering even simple skills we are robbing from the future. Every time a manufacturer finds a means to make his product effective for an even briefer time we are robbing from the future. When wealth is removed from the economy and then funneled out through a few hands it is money that might have gone to increase efficiency or for some other useful purpose.
Everywhere we look now we see a systemic robbing of our future and printing money that everyone knows can never be repaid and never earn interest is just another form of borrowing future.
How long until there is no future left? How long until basic jobs go undone because there is no one to train? How long can we lower standards until everyone is incompetent?
@Higashiyama said:
What advice would you give to a middle class recently retired American? Assume that they are comparatively well off, but very little cushion - house paid off, no debt, a modest 401k, and social security.
Some obvious advice, though not necessarily easy to follow: stay healthy and expect to work part time indefinitely; if you have any tangible asset purchases in mind, do it sooner than later; possibly keep some money in very carefully selected equities; annually move a fixed percent of our assets to gold over some period, such as 5 years, until you are at 30 % gold? For a somewhat wealthier individual, perhaps a carefully vetted agricultural property.
We are not going to have hyperinflation in the sense of Weimar Germany or Zimbabwe, but it is hard to imagine that we won't return to double digits.
The person could move outside the US or another developed country to one with a cheaper cost of living. This is the easiest thing financially to lower your costs.
A holder of USD can also swap to another currency. My current preferred one is the CAD, not because I think it is that much better, but because it is somewhat better managed and since my brother lives there, I might use Canada as my home base later. (I consider it more civilized than the US also.)
Having a mortgage under certain circumstances might be a reasonable thing to do, if you can comfortably afford it. Personally, I dislike having any debt but everyone has to live somewhere, owning a reasonably priced home hedges your housing costs somewhat and a mortgage is also a hedge against a depreciating currency.
US stocks (in the aggregate) are absurdly overpriced. Foreign stock markets aren't in the same full blown mania but not immune to crashing either in a crisis. Debt is the biggest bubble of all. A lot of real estate is also ridiculously overpriced.
I think everyone should own some gold or silver but make sure you can afford to keep it and don't become a forced seller in a crisis. I expect a lot of forced selling by "metal bugs" at some point in the future. Gold is relatively expensive now versus practically everything else. It's far from cheap. I think it will become more overpriced later but at some point, it's also going to be necessary to exit to realize your gains. Silver is a lot cheaper but I have given my reasons for this before.
Someone could also buy land in a stable location to grow their own food but it's a lot less practical when you are older.
Comments
Jim Rogers calls it More Money Today.
Paper tiger.
Jim Rickards
Jim Ricards says the stage is now set for MMT
"Eventually, you end up with default, inflation, higher interest rates, higher taxes or all of the above. The U.S. will go broke."
Give Me Liberty or Give Me Debt
It didn't work for john Law in France with the Banque Générale Privée or the Mississippi Company, but people think that this time is different. Fiat always goes to ZERO.
It does seem clear that MMT is gaining ground, even if most mainstream politicians will still avoid the term for a while.
But, the experience of the past few years, especially 2020, and the experience of Japan, may make deficit hawks look like "boys who cried wolf". However, the fact that monetary expansion has yet to be severely inflationary is relatively easily explained (for example, in terms of globalization, demographics, and technology). The environment is changing, and the impact of the coming wave of monetary expansion will be different. Nobody should panic -- the world is not going to end and it will likely be prosperous for many -- but baby boomers, especially, should take steps to protect themselves. Anyone on a non-indexed fixed income or relying on a small pool of financial assets is in danger of getting crunched.
I was always taught money doesn't grow on trees. Those idiot educators, It's 2021 and it most certainly does.
The whole worlds off its rocker, buy Gold™.
And when the helicopter flies lower:
Give Me Liberty or Give Me Debt
Monetary policy since 2008 - print and spend now, worry later. It can't end until suddenly it does. What will make it end? The hyperinflation that it always delivers. So for now, sit back and continue to profit from the bubbles - you are going to need those profits when it ends.
Give Me Liberty or Give Me Debt
What advice would you give to a middle class recently retired American? Assume that they are comparatively well off, but very little cushion - house paid off, no debt, a modest 401k, and social security.
Some obvious advice, though not necessarily easy to follow: stay healthy and expect to work part time indefinitely; if you have any tangible asset purchases in mind, do it sooner than later; possibly keep some money in very carefully selected equities; annually move a fixed percent of our assets to gold over some period, such as 5 years, until you are at 30 % gold? For a somewhat wealthier individual, perhaps a carefully vetted agricultural property.
We are not going to have hyperinflation in the sense of Weimar Germany or Zimbabwe, but it is hard to imagine that we won't return to double digits.
Double digit price inflation will decimate the lifestyle of most Americans, many of whom depend on ongoing credit. Wage increases always lag price increases. On the other hand it just might offer decent returns those who are saving. The savers of this country have been penalized by monetary policy since the ongoing financial crisis began in 2008.
Give Me Liberty or Give Me Debt
We're not only printing money but robbing the future in many ways. Every time the schools produce another class that can't read and write or have great difficulties mastering even simple skills we are robbing from the future. Every time a manufacturer finds a means to make his product effective for an even briefer time we are robbing from the future. When wealth is removed from the economy and then funneled out through a few hands it is money that might have gone to increase efficiency or for some other useful purpose.
Everywhere we look now we see a systemic robbing of our future and printing money that everyone knows can never be repaid and never earn interest is just another form of borrowing future.
How long until there is no future left? How long until basic jobs go undone because there is no one to train? How long can we lower standards until everyone is incompetent?
and credit cards work until the bill exceeds the checkbook balance.
Give Me Liberty or Give Me Debt
The person could move outside the US or another developed country to one with a cheaper cost of living. This is the easiest thing financially to lower your costs.
A holder of USD can also swap to another currency. My current preferred one is the CAD, not because I think it is that much better, but because it is somewhat better managed and since my brother lives there, I might use Canada as my home base later. (I consider it more civilized than the US also.)
Having a mortgage under certain circumstances might be a reasonable thing to do, if you can comfortably afford it. Personally, I dislike having any debt but everyone has to live somewhere, owning a reasonably priced home hedges your housing costs somewhat and a mortgage is also a hedge against a depreciating currency.
US stocks (in the aggregate) are absurdly overpriced. Foreign stock markets aren't in the same full blown mania but not immune to crashing either in a crisis. Debt is the biggest bubble of all. A lot of real estate is also ridiculously overpriced.
I think everyone should own some gold or silver but make sure you can afford to keep it and don't become a forced seller in a crisis. I expect a lot of forced selling by "metal bugs" at some point in the future. Gold is relatively expensive now versus practically everything else. It's far from cheap. I think it will become more overpriced later but at some point, it's also going to be necessary to exit to realize your gains. Silver is a lot cheaper but I have given my reasons for this before.
Someone could also buy land in a stable location to grow their own food but it's a lot less practical when you are older.
The Failure Of MMT Is Now Evident
Give Me Liberty or Give Me Debt