Stable Coins

 

STEM Tech bros figuring out a way to safely bypass the current Art degree administered inefficient and sometimes treacherous banking system…

🚨CHAMATH: "SpaceX uses Stablecoins. They collect payments from Starlink customers and when they aggregate them in long-tail countries, they don't want to take the FX risk or deal with sending wires, so they'll swap into stablecoins, send it to the US, and then swap back to USD." pic.twitter.com/eHxGCW919y

— Autism Capital 🧩 (@AutismCapital) December 21, 2024

Reserves in SLR

 

Have to watch to see if banking lobby again approaches a now new GOP government with this regulatory modification request… last time in 2021 nutty Pocahontas led Dems wouldn’t agree with it so we’ve remained susceptible to  the financial asset volatility Art degree monetarists can cause when they “inject some pumped in money!” in their characterizing deranged way they think Accounting abstractions are REAL…

I think UST should be in the SLR computation, although there might be some weighting of risk according to duration.

O/N reserve balances definitely should be excluded, as done by BoE and currently ECB.

— Kim Driver (@KimDriver11) May 5, 2023

If we can get this then there will be A LOT of reduction in realized volatility going forward while most participants will be still be paying the historic volatility prices…  

🤔

Trade deficit

 

Good point by Setzer … if they stick Trump with the “debt ceiling!” he could end up going after all these foreign USD savings to fund his agenda…

I see that President elect Trump's eye has turned to the trade deficit with Europe --

So a reminder that the single most important thing the US could do to bring down the deficit with the EU is to reform the US corporate tax code to end the pro pharma offshoring provisions

1/ pic.twitter.com/ITaXmbwsQJ

— Brad Setser (@Brad_Setser) December 20, 2024

Bond market now pricing in one 25 bps rate cut by Fed in 2025

 

Trump is never going to stand for this and will go to war with the Democrat Fed monetarist morons… 

The bond market is now pricing in just one 25 bps rate cut by the Fed in all of 2025. Back in September six 25 bps rate cuts were expected.https://t.co/l5IYmkf6Ih pic.twitter.com/syX4RcqQaP

— Charlie Bilello (@charliebilello) December 19, 2024

Trade Isn't Money for Nothing — Stephanie Kelton

In MMT terms, imports are a real gain and exports are real loss, where "real" means "stuff" in the sense of resources used in production including and the labor that gets embedded. T

The importing country is getting commodities that the members of society in the exporting country are not able to enjoy in spite of having produced them, while the members of society of the importing country are enjoying those commodities instead of the actual producers. 

So, from a real point of view rather than a financial one, importers are getting a better deal in exchanging currency for actual goods — almost. Imports mean that the importer is receiving embedded labor as part of the deal which may affect employment in the importing country negatively Exporting has the opposite effect on labor by creating jobs. But these jobs are producing goods for others rather than the producer country.

Focusing on the financial aspect of the exchange obscures this. The Trump team seems to be overly focused on the financial aspect of international transactions.

On the other hand, unlike the US which is a net importer, China is a net exporter. The reason is that China's domestic demand is insufficient to absorb its productive potential resulting from it policy toward primary investment in productive capital. 

The export market serves to provide employment where the domestic market is lacking in demand to do so. Addressing this is is a current topic in China now, and the leadership is working on policy planning to reverse this condition by increasing domestic demand and thereby domestic consumption as a percentage of the economy. The goal is to do this without increasing moral hazard resulting from "easy money" and "hand outs" in form of "helicopter money."

Leaving out a lot of detail, China is a large and diverse country, so increasing demand domestically across the board in an equitable fashion is challenging. The conclusion is that this eludes central planning and policy that acts directly. The currency planning debate is focused on doing increasing domestic demand regionally and locally to take diversity and equity into account in a socialistic environment., e.g, without overly increasing inequality. China wants to avoid what has been happening in the West, with the top of the town profiting inordinately from policy.

The Lens
Trade Isn't Money for Nothing
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders

The Tyranny Of The Myths — NeilW

Economics is often described as the dismal science, but it’s more apt to call it the mystical science. For generations, the field has been ruled by aphorisms that sound profound but crumble under scrutiny. These sayings, like “tighten your belt in tough times” or “the market knows best,” are not neutral observations. They are myths crafted to justify particular views of how society should be run—views that often prioritise the interests of the few over the many.

Take monetarists, for example, with their obsession with controlling inflation through tight monetary policies. Their aphorisms reinforce the “sound money” myth, which ultimately serves financiers by ensuring that debt repayments hold more value than wages. Similarly, New Keynesians push the myth of the impartial, unelected central bank—a supposedly noble institution that must remain insulated from democratic accountability to protect us from our worst instincts. But making “correct decisions” for whom? These systems, by design, elevate the interests of those who already hold power and wealth.

A New Compass for a Modern Economy

In contrast, a more honest approach to economics would start from the premise that democracy can be trusted—that the people of a nation have the agency to shape its future via the ballot box. This is the bedrock of what I see as modern economic thought, encapsulated by a simple aphorism:

It is better to give poor people a job than rich people a bung...

New Wayland

The Tyranny Of The Myths
NeilW

See also

Keeper Keynes quote if you don't have it on file already.

Lars P. Syll’s Blog
Economics — a pseudo-analogy with physics
Lars P. Syll | Professor, Malmo University

Episode 9 (S2) of the Smith Family Manga is now available – the Prime Minister embarrasses himself —Bill Mitchell

Today (December 13, 2024), MMTed releases Episode 9 in the Second Season of our Manga series – The Smith Family and their Adventures with Money. Have a bit of fun with it while learning Modern Monetary Theory (MMT) and circulate it to those who you think will benefit.

William Mitchell — Modern Monetary Theory

Episode 9 (S2) of the Smith Family Manga is now available – the Prime Minister embarrasses himself

Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Argentina ends deficit for first time in 123 years…

 

Dour looking group taking a victory lap:

🇦🇷 MILEI: ARGENTINA ENDS DEFICIT FOR THE FIRST TIME IN 123 YEARS

"The deficit was the root of all our evils—without it, there’s no debt, no emission, no inflation.

Today, we have a sustained fiscal surplus, free of default, for the first time in 123 years.

This historic… https://t.co/uszEgPd493 pic.twitter.com/nt5jJGQM1V

— Mario Nawfal (@MarioNawfal) December 11, 2024

Their equity market index responding favorably….

But they have been drastically reducing their risk free rate at the same time:

"The First Cause of Stability of Our Currency is the Concentration Camp": Central Banker Solidarity on the Road to Hitler's Czechoslovakian Gold — Pavlos Roufos

This is an article on the history and politics of central banking. As such it is important for understanding the details of MMT institutional analysis regarding banking in historical context.

There is also some fascinating information about Reichsbank President Hjalmar Schacht.

It also provides insight into how central bankers still think and operate. It's a club.

Notes on the Crisis
"The First Cause of Stability of Our Currency is the Concentration Camp" [Adolf Hitler]:
Central Banker Solidarity on the Road to Hitler's Czechoslovakian Gold
Pavlos Roufos

See also:

"The powers of financial capitalism had (a) far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank... sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world." 

    

Carroll Quigley, Tragedy and Hope: A History of the World in Our Time. New York: The Macmillan Company, 1966, VII, page 324.

Carroll Quigley (1910-1977) | Professor of History at Georgetown University, member of the Council on Foreign Relations (CFR), mentor to Bill Clinton.

Can BRICS Create a Multipolar World? — Fadhel Kaboub (MMT economist)

Decolonize to Dedollarize!

I’m often asked whether BRICS is going to be the game-changer that will disrupt the current geopolitical hierarchy, dedollarize the system, and create a new multipolar word. My position has always been that we can’t dedollarize a system that hasn’t been structurally decolonized yet, and that no new multipolar world can be born without Africa and the rest of the Global South being repositioned away from the bottom of the global hierarchy and at the center of a New International Economic Order.…

Global South Perspectives—Reflections & Analysis by Fadhel Kaboub

Can BRICS Create a Multipolar World?
Fadhel Kaboub, Associate Professor of economics at Denison University (on leave) and President of the Global Institute for Sustainable Prosperity. He currently serves as the Under-Secretary-General for Financing for Development at the Organisation of Educational Cooperation in Addis Ababa, Ethiopia.He also held a number of research affiliations with the Levy Economics Institute, the John F. Kennedy School of Government at Harvard University, the Economic Research Forum (Cairo), Power Shift Africa (Nairobi), and the Center for Strategic Studies on the Maghreb (Tunis). Fadhel is Tunisian-American MMT economist. Ph.D. in Economics & Social Science Consortium, 2006, University of Missouri - Kansas City. M.A. in Economics, May 2001, University of Missouri - Kansas City. B.S. in Economics, June 1999, with Distinction

Austerity cultist Kenneth Rogoff continues to bore us with his broken record — Bill Mitchell

His latest intervention (November 28, 2024) –
Europe’s Economy Is Stalling Out – was published by Project Syndicate, which regularly gives space to these nonsensical mainstream articles.

The simple proposition that Rogoff offers is:

"As Germany and France head into another year of near-zero growth, it is clear that Keynesian stimulus alone cannot pull them out of their current malaise. To regain the dynamism and flexibility needed to weather US President-elect Donald Trump’s tariffs, Europe’s largest economies must pursue far-reaching structural reforms."

And those structural reforms have to tackle the:

"… bloated and sclerotic welfare states to blame?"

Apparently, those that hold to the most basic macroeconomic rule that spending equals output and income and drives employment growth are “detached from reality”....

William Mitchell — Modern Monetary Theory

Austerity cultist Kenneth Rogoff continues to bore us with his broken record
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Yes, Banknotes Are A Central Bank Liability — Brian Romanchuk

David Bholat recently wrote “How to Modernise Central Bank Balance Sheets: No Notes.” It is partly in response to this article. The idea is that banknotes (“dollar bills”/”pound notes” etc. issued by the government should not be classified as a liability, rather as some form of capital or possibly taken off the balance sheet. I have run into variants of this idea in the past (the stronger version being that all forms of the monetary base are not liabilities), and the root idea is that “monetary issue is good for the economy, so how can it be a liability?” Such a redefinition or removal of banknotes is either misleading or wrong.

Bond Economics

Yes, Banknotes Are A Central Bank Liability

Brian Romanchuk

What Trump's Pick for Treasury Secretary Gets Right (and Wrong) about MMT — Stephanie Kelton

Scott Bessent is aware of MMT but he has a faulty understanding of what MMT says, Kelton argues. On the positive side, he is not clueless, like most others. For example, he gets that high rates are may be stimulative and low rates contractive, based on policy outcomes of the Bank of Japan.

The Lens
What Trump's Pick for Treasury Secretary Gets Right (and Wrong) about MMT
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders

Money for beginners — Lars P. Syll

Plug for Randy Wray's popular-access book on basic MMT.

Lars P. Syll’s Blog
Money for beginners
Lars P. Syll | Professor, Malmo University

Rates

 

Why would you have your RRP rate above your min FFR target and then not understand why MMMFs won’t fully engage in Tsy markets?

How stupid are these f-ing people?

When Fed did RRP in the first place they created a competing risk free asset class to Tsy securities which was bad enough… but then set the rate higher than your min target?

#Fed officials are mulling a 5 bps cut to the reverse-repo rate to align it with the lower end of the federal funds target range. Nov meeting minutes highlight this as a "technical adjustment" to control the benchmark rate. RRP usage: $148.8B on Tue.#Fed #FOMC #Powell #inflation pic.twitter.com/QVDV6FlIMD

— Rymond_Inc (@rymondIncKenya) November 27, 2024

So what’s going to happen is these Art degree monetarist morons are going to cause an auction failure and then all the other Art degree debt doomsday morons are going to go running all around saying “ no one will loan the US any more money! … no one will loan the US any more money! … “

You watch…

How to Cut $2 Trillion in Federal Spending Without Breaking a Sweat Stephanie Kelton

As James Galbraith put it years ago, "It's the interest rate, stupid."

Nostalgia: Carlos "beowulf" Mucha liberally quoted. And no, not "the coin."

The Lens with Stephanie Kelton
How to Cut $2 Trillion in Federal Spending Without Breaking a Sweat
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders

Tariffs As A Fiscal Tool? — Brian Romanchuk

Has Trump thought his tariff proposal through? Brian gives reasons to doubt that this move would be successful in replacing the income tax or substantially affecting it.

BTW, Brian has migrated from X to Bluesky along with many others in the fields of economics and finance. Links provided at the end of the post.

Bond Economics

Tariffs As A Fiscal Tool?

Brian Romanchuk

Class

 

Whoa!… hold up!…  was Marx correct? 🤔

Americans are increasingly voting along class lines, not racial ones. That could upend how we’ve thought about politics for decades. https://t.co/rWBJFK32BD

— The Wall Street Journal (@WSJ) November 15, 2024

Episode 8 (S2) of the Smith Family Manga is now available — Bill Mitchell

Today (November 15, 2024), MMTed releases Episode 8 in the Second Season of our Manga series – The Smith Family and their Adventures with Money. Have a bit of fun with it while learning Modern Monetary Theory….

William Mitchell — Modern Monetary Theory
Episode 8 (S2) of the Smith Family Manga is now available

Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Oh no...Eva Langoria leaving the U.S.!!!

Oh no, what will we do? "Privileged" (her words) Eva Langoria is leaving the U.S.!! What a loss.  Here's Eva, lamenting for all the rest of us who will be left behind.

“Most Americans” are “going to be stuck in this dystopian country, and my anxiety and sadness is for them."

Thank you, Eva, for your fake concern. We'll try to get by in this terrible country as best as possible. But before you go, can you please take all of your Hollywood asshole friends, too? America can't stand you and your privileged elitist sanctimonious jerks from Tinseltown. Get lost. Go!! 

Hopefully, this is not an empty threat by Eva, as we hear regularly from people like Alec Baldwin, Susan Sarandon, and Robert De Niro. They should take the lying, terrorist-loving, woke, anti-American mainstream media with them.

Wishful Thinking

 

More wishful thinking from Democrat left:

Given voters’ ire at the high cost of living, it might be wrong to assume Donald Trump will simply pick up where he left off and pressure the Fed to take interest rates right on down https://t.co/Mf70bunUQr

— Bloomberg Economics (@economics) November 12, 2024

Trump v Iran

 

Reports Iran conspired to assassinate Trump…

The DOJ charged 3 individuals in an assassination plot against Trump. Two are in custody and one is allegedly living in Tehran — the capital city of Iran.

Some really interesting things are happening right now. pic.twitter.com/8rsDBdyjGk

— johnny maga (@_johnnymaga) November 8, 2024

6 of these m-fers just deployed to Qatar plus boomers to the region…

Maybe Trump will demand the surrender of the Iranian regime…or finally incinerate that whole goat f-ing rats nest…

Volatility premiums increasing 2 months out…

Trump v Fed ?

 

This guy a MAGA Trump insider perhaps in line for AG (probably too much to hope he gets it 🙏🏻) but it’s revealing that he mentions the bankruptcy first…

Trump’s opponents attempted to bankrupt him for non-fraud.

And imprison him for life for non-crimes.

And take him off the ballot.

And take off his head.

Now they want “unity”?

Fuck them.

Let’s unify them in prison.

— 🇺🇸 Mike Davis 🇺🇸 (@mrddmia) November 8, 2024

Biden 2022 rate increases were unprecedented… so you can see what they did they put the rates way up to squeeze him, then they get commie kangaroos in NYC to impose half a billion dollars civil judgement in attempt to to bankrupt him…  flushing the US CRE market down the toilet bowl in the process causing mini banking crisis in March 2023 … hoping Trump somehow got caught up in the whirlpool…

So his first mission (he will never say that it is) will be to reverse all this ..  which would start with quick reversal of Biden rate rate increases to benefit his position and a lot of others like him who also have been being squeezed… which means policy rate down at least to 2% pronto.. will cover it politically by saying he’s getting mortgage rates down for young households which will be an added political benefit…

Going to be interesting to see if the Fed commie deep state Monetarists are going to be the first to fight him on this part of his agenda..,

Functional finance — Lars P. Syll

What monetarists. deficit hawks, and debt phobes don't get. Quotes by Abba Lerner and John Maynard Keynes.

Lars P. Syll’s Blog
Functional finance
Lars P. Syll | Professor, Malmo University

On Sraffa and Keynes — Lars P. Syll

Minsky quote that underlies not only Keynes but also MMT.

Lars P. Syll’s Blog
On Sraffa and Keynes
Lars P. Syll | Professor, Malmo University

Escobar: The Roadblocks Ahead For The Sovereign Harmonious Multi-Nodal World — Pepe Escobar

We will need weeks, months, years to fully grasp the enormity of what took place in Kazan during the annual BRICS summit under the Russian presidency.

For the moment let’s cherish arguably the most appropriate definition of BRICS as a laboratory of the future: this lab, against nearly insurmountable odds, is actively engaged in creating a Sovereign Harmonious Multi-Nodal World.

My take is that there were two tracks leading up to the meeting of BRICS+ in Kazan. 

The first track was widely reported in the Alt-Media and was wildly optimistic about the outcome since it focused almost exclusively on the "key players" none of whom had any political clout. It was even speculated that a new monetary system based on a BRICS+ currency would be announced. This turned out to be pie-in-the-sky.

The second track that was taking place behind the scenes and was not reported on or factored in by most of the Alt-Media. This group emerged into view immediately prior to Kazan as a meeting of the heads of the central banks of the the BRICS+ nations. This was a tip off that "the grown-ups" would be managing the proceeding and outcomes, which is what happened. 

The boat did not rock as many had anticipated.  It has now become clear that BRICS+ intends to work within the existing system to reform it rather than to revise it drastically or to shape a new system or to radically "de-dollarize."

In other words, practicality won the day rather than confrontation. Change is likely to be gradual rather than dramatic. The task at hand is to develop alternative means of settlement for international accounts that avoids sanctions and that is already taking place through binary agreements to settle in the currencies of the respective partners.

Pepe gives his take on it.

Zero Hedge
Escobar: The Roadblocks Ahead For The Sovereign Harmonious Multi-Nodal World

Pepe Escobar

Government job creation programs deliver significant (net) long-term benefits — Bill Mitchell

On April 5, 1933, US President Roosevelt made an executive decision to create the – Civilian Conservation Corps (CCC) – which was a component of the suite of government programs referred to as the – New Deal – that defined the Federal government’s solution to the mass unemployment that arose during the early years of the – Great Depression. These programs have been heavily criticised by the free market set as being unnecessary, wasteful and ineffective. Critics assert that no long-term benefits are forthcoming from such programs. However, those assertions are never backed by valid empirical evidence. A recent study by US academics has provided the first solid piece of evidence that the CCC delivered massive long-term benefits to the individuals who participated in it. And these benefits considerably outweigh the dollars outlaid by the government. I discuss that research today. The results also point to the effectiveness of a Job Guarantee program....

William Mitchell — Modern Monetary Theory

Government job creation programs deliver significant (net) long-term benefits
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

MMT — debunking the deficit — Lars P. Syll

Lars comments on a quote from Stephanie Kelton's The Deficit Myth showing the loanable funds theory being inconsistent with stock-flow accounting.

Lars P. Syll’s Blog
MMT — debunking the deficit
Lars P. Syll | Professor, Malmo University

24 per cent annual interest on time deposits: St Petersburg Travel Notes, installment three — Gilbert Doctorow

Not much happening regarding MMT these days.

Herer is an anecdotal report on Russian banking. And, yes, you read that right. You get 24% not the bank.

Doctorow is an American residing in Brussels who spends a good deal of time in Russia. His wife is Russian and he is fluent in Russian. A "Russianist," he has a a PhD in history (Harvard) and is a retired business person. His reporting does not conform to the narrative.

Gilbert Doctorow—International relations, Russian affairs
24 per cent annual interest on time deposits: St Petersburg Travel Notes, installment three

Gilbert Doctorow

Did The Latest BRICS Summit Achieve Anything Of Tangible Significance At All? — Andrew Korybko

The conclusion is that it’s a lot easier to talk about creating truly alternative institutions than actually doing so, which means that BRICS will likely just remain a talking club, or a “multitasking laboratory of global governance” as Kortunov diplomatically described it. That’s not to downplay the group’s role since it’s important for major and developing non-Western countries to discuss pressing issues of the evolving world order, especially economic-financial ones, but that’s not the same as what enthusiasts expected.

A dose of reality. The Alt-Media got a quite a bit ahead of reality with respect to their expectations of the initial outcome.

The Kazan Summit therefore wasn’t a failure, and in fact, it succeeded in its only realistic goal all along of gathering its members and partners together to discuss ways to voluntarily accelerate financial multipolarity processes such as through the increased use of national currencies. The outcome was always going to be more symbolic than tangible due to the group’s purely voluntary nature, though some observers had false expectations and thus feel bitter, but now they know what BRICS is really about.  

Andrew Korybko's Newsletter

Did The Latest BRICS Summit Achieve Anything Of Tangible Significance At All?
Andrew Korybko