An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Actually, deficits by the monetary sovereign ALLOW private debt to be repaid in aggregate because bank lending creates the principal but not the required interest. Another way to obtain the required interest is to run a trade surplus. In that case, the central bank sells new fiat to foreigners so they can buy the exports. But note then that the exporting nation is exporting real wealth to obtain aggregate interest. But the monetary sovereign can create that interest instead and we get to KEEP THE REAL WEALTH!
2 comments:
Wow! Funny money, deficits and onerous taxes help the elite loot the middle class.
Who knew?
Actually, deficits by the monetary sovereign ALLOW private debt to be repaid in aggregate because bank lending creates the principal but not the required interest. Another way to obtain the required interest is to run a trade surplus. In that case, the central bank sells new fiat to foreigners so they can buy the exports. But note then that the exporting nation is exporting real wealth to obtain aggregate interest. But the monetary sovereign can create that interest instead and we get to KEEP THE REAL WEALTH!
Post a Comment