Most people are not familiar with MMT (Modern Monetary Theory) and even those who have heard of it or who claim to understand it tend to dismiss it as some kind of fringe economics.
However, MMT is not at all some kind of fringe economics. MMT concisely describes the functioning of our monetary system, a system that for the past 45 years has been pretty much based on free-floating exchange rates, where countries issue their own, non-convertible currency. When I say non-convertible I mean not convertible at some fixed rate for gold or some other currency.
I'm an economist by education, but I was taught all the wrong stuff in college. I started getting into MMT 14 years ago, and since then I have been a proponent and teacher of it.
My understanding of MMT has allowed me to avoid the forecasting pitfalls that we saw from most mainstream economists. They were all stuck in the gold standard or things like loanable funds theory, and still are. That's why they wrongly saw the dollar crashing and inflation and interest rates skyrocketing when the Fed started to engage in all of its extraordinary measures during the Great Financial Crash.
In addition, they have been avowed deficit "hawks" (which has been hurting economies everywhere) and predicting debt crises in Japan, credit bubbles in China and "stimulus" that never seems to come from the negative interest rates in Europe.
I was never on board with any of those things. In fact I was the opposite; not just to be different, but because I knew what the effects of those policies would be under our current monetary regime. It was not guesswork for me; it was simply a level of understanding.
If you want an example of MMT in action, I will give you one right now. Look no further than the action taken by the Russian central bank last week.….The Street — Real Money
Traders Were Wrong to Sell the Russian Currency