All of MMT had this right because MMT allows you to understand that the central bank sets rates and that the funds used to buy government securities comes from government spending itself.
It's bad enough that Bill Gross got it wrong, but he embarrassed himself by Tweeting, "Who will buy them now?" when the Fed ended QE2 on June 30. For a currency issuing nation there is never lack of funds or a lack of buyers for public debt issued in its own currency, by definition.
Gross continues to embarrass himself in his explanation of why he shorted the bonds:
|“Do I wish I had more Treasurys? Yeah, that’s pretty obvious,” Mr Gross told the Financial Times last week, adding: “I get that it was my/our mistake in thinking that the US economy can chug along at 2 percent real growth rates. It doesn’t look like it can.”|
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