The Case of the Missing Report–Part 2 — Bill Mitchell

Today, we solve the ‘Case of the Missing Report’. Recall from – The Case of the Missing Report – Part 1 – that the Asian Development Bank published a report I had written (with Randy Wray and Jesus Felipe) – A Reinterpretation of Pakistan’s ‘economic crisis’ and options for policymakers (draft version) – in June 2009 as part of work I was undertaking for the Bank at the time on economic development in Central Asia. The report was published on June 1, 2009 as an official ADB Economics Working Paper No. 163 after our presentations were enthusiastically received at the Bank during seminars we gave. The Report was indexed by the major bibliographic and indexing services and evidence of that report still exists today. For example, the Asian Regional Integration Center provides a link to some 30 records covering – Pakistan – including our ADB paper with the official publication date. The ‘official’ link to the publication – https://www.adb.org/Documents/Working-Papers/2009/Economics-WP163.pdf – however, now returns a ‘Page not Found’ error. Then, if you search for ADB Economics Working Paper No. 163 on the ADB WWW Site you will find another paper – The Optimal Structure of Technology Adoption and Creation: Basic Research vs. Development in the Presence of Distance to Frontier – which somehow became Working Paper No 163 and was also published in June 2009. So what gives? How did our ADB Economics Working Paper No. 163 disappear from the face of the Earth to be replaced by another ADB Working Paper No. 163, all in the space of a day or so? In this Part 2 of the ‘Case of the Missing Report’, I provide the solution to the mystery....

William Mitchell — Modern Monetary Theory

The Case of the Missing Report – Part 2
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

NVDA exports

 

Art degree morons as usual can’t understand the Accounting abstractions… think NVDA has to be shipping the REAL units to where the Accounting ABSTRACTIONS are recorded…

Like I guess they think we’re importing $300B net of Guinness, Jameson and potatoes from Ireland…

It’s the same as the current Trump “tariffs!” womanish soap opera… A LOT of people are going to get that wrong for the same reasons…

Looks like $NVDA GPUs have never been physically in Singapore ⚠️

So, according to $NVDA 10-Q disclosures “For example, most of the shipments associated with Singapore revenue went to either the United States or Taiwan in the first quarter of fiscal year 2025.”

Guess what..… https://t.co/n0Wr9IEz8M pic.twitter.com/plgg6ZdA7K

— JustDario 🏊‍♂️ (@DarioCpx) June 29, 2024

The Case of the Missing Report – Part 1 — Bill Mitchell

 This blog post is a long time in gestation and I could have written in 2009 which is the relevant year of the events that I will document in this two-part series. My conversations with government officials during my working trip to the Philippines last week highlighted several things, including their sheer terror of IMF intervention and the ratings agency. I will write separately about that in a later post. But the IMF watches these types of nations like a hawk and is ready to pounce to enforce their authority at the slightest departure from the neoliberal macroeconomic policy line. As long as these types of nations concede to the IMF bullying they have very little hope of developing towards being advanced states. And IMF bullying is what this blog post is about. This is Part 1 of a two-part story that might be summarised as the ‘Case of the Missing Report’. I will solve the mystery in Part 2, which will be published on Thursday of this week.

William Mitchell — Modern Monetary Theory
The Case of the Missing Report – Part 1
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

The Impact of 25% Tariffs on Canadian GDP—The Bank of Canada vs Deepseek — Stephanie Kelton

Stephanie asks Deepseek.

The Lens
The Impact of 25% Tariffs on Canadian GDP—The Bank of Canada vs Deepseek

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

What is the University of Michigan Survey of Consumer Sentiment Telling Us? — Stephanie Kelton

 Expectations.

The Lens
What is the University of Michigan Survey of Consumer Sentiment Telling Us?
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

Source of funds for tariffs

 

This statement/tweet isn’t exclusively true:

MAGA will do whatever, but tariffs are taxes we pay on imports. It's time media outlets called them that. https://t.co/OZnlnS5YvU

— Dean Baker (@DeanBaker13) January 26, 2025

the foreign entities can simply lower their import prices in USD terms and access these foreign USD account balances as source of USDs to pay any new tariffs:

 

A Framework for a Basic Bank — NeilW

In analysis, it’s helpful to simplify and focus on the core elements of a system. Today, we will identify the essential processes and structures required to create a functional bank, accompanied by diagrams to illustrate these key processes.

New Wayland Blog

A Framework for a Basic Bank
NeilW

Climate nutters useful idiots for insurance scammers

 

Can’t even make it up… moron intellectual degenerate Art degree climate nutters (who couldn’t tell you the atomic number of hydrogen) running interference for the insurance scammers…

California's insurance system is broken for a variety of reasons, but climate change is not one of them.

There is no greater consumer scam underway than insurance industry trade groups blaming climate change for skyrocketing rates. The media is complicit, on the take. https://t.co/VN9RU7F7Oz

— Ryan Maue (@RyanMaue) January 25, 2025

Field trip to the Philippines–Report — Bill Mitchell

I have been working in Manila this week as part of a ‘knowledge sharing forum’ at the House of Representatives which was termed ‘Pathways to Progress Transforming the Philippine Economy’ that was run by the Congressional Policy and Budget Research Department, attached to the Congress (Government). I am also giving a presentation at De La Salle University on rogue monetary policy. It has been a very interesting week and I came in contact with several senior government officials and learned a lot about the way they think and do their daily jobs. I Hope the interactions (knowledge sharing) shifted their thinking a little and reorient to some extent the way they construct fiscal policy. This blog post reports (as far as I can given confidentiality) what went on at the Congress.

William Mitchell — Modern Monetary Theory

Field trip to the Philippines – Report
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

What I've Been Up To — Stephanie Kelton

I am back in New York after an extended trip to California. Before I left town, I joined Scarlet Fu on Bloomberg Markets. We talked about the GOP plan to pass “one big beautiful bill” as quickly as possible and how much of it they’re going to try to offset/“pay for” (versus adding to the deficit)....

The Lens

What I've Been Up To
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 Sand…

See also

The following mentions MMT and Stephanie

NTD

5 Key Points From Biden’s Final Interview as President

Nathan Worcester

The Reserve Requirements Fad: A Solution in Search of a Problem NeilW

The Latest Epicycle in Interest Rate Mythology

Every so often, a new fad emerges to prop up the fantasy that interest rate targeting is some economic panacea. The latest contender? Reserve requirements.

The premise is simple: if we stop paying interest on massive excess reserve quantities held by banks, we won’t have to hand over vast sums to them. The stunning amount of intellectual effort required to come to this conclusion is why economists earn the big money. Predictably, it has been seized upon by those Right-Thinking Lefties who detest bank profits but remain wedded to the mystical notion of an all-controlling interest rate.

Misunderstanding Banking—Again

Since economists construct their banking theories on layers of myths, they inevitably arrive at the wrong conclusions. Yanis Varoufakis fell into precisely this trap when applying the reserve requirement argument to the UK.

So, let’s take a step back and examine reserve requirements in the context of UK banking—without the distortions of mainstream economic dogma....

New Wayland Blog

The Reserve Requirements Fad: A Solution in Search of a Problem
NeilW

The Gower Intitiative for Modern Money Studies newsletter – January 2025

Report on happenings in 2024 with some links.

The Gower Initiative for Modern Money Studies
The Gower Intitiative for Modern Money Studies newsletter – January 2025

Trump plan to reduce “inflation!”

 

Trump plan to reduce “inflation!”…. 1.  Get energy production costs down (ie euthanize the “climate!” nutters) … 2. Reduce the policy interest rate (ie order the Fed to reduce FFR/IOR)…

Nooooooooooobody right now thinking he can do any of this …

Fed withdraws from global “Climate!” group

 

This is a good sign the Fed may be generally acquiescing to Trump admin policies….

🇺🇸Fed Announces Withdrawal from Global Climate Coalition. pic.twitter.com/xjSgOFPRwi

— Update NEWS (@UpdateNews724) January 17, 2025

Episode 10 (S2) of the Smith Family Manga is now available—Coal Port Blockade but the progressives want to tax the rich — Bill Mitchell

Today (January 17, 2025), MMTed releases Episode 10 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 10 (S2) of the Smith Family Manga is now available – Coal Port Blockade but the progressives want to tax the rich
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

“Hydrants out of water!”

This is funny the Art Degree morons all think fire hydrants contain a fixed amount of water (rather than control pressure) i.e.  “the hydrants ran out of water!”  … meanwhile they think govt treasury can “pump in money!” … both AT THE SAME TIME…   😂😂😂😂😂

Gov. Newsom on LA not having water in its fire hydrants: Not my job pic.twitter.com/2SzW3Az1D8

— End Wokeness (@EndWokeness) January 9, 2025

Return to a "Appropriate and Positive Interest Rates" ーInterpreted through the Lens of Monetary Theory — Masashi Chikahiro

MMT influence is spreading.

Chuo University

Return to a "Appropriate and Positive Interest Rates" ーInterpreted through the Lens of Monetary Theory ー Sixth Collaborative Course with "Otemachi Academia"
Masashi Chikahiro, an associate professor at Chuo University's Faculty of Economics (Japan)

See also

Based on Japanese studies.

William Mitchell — Modern Monetary Theory

Shifts in societal attitudes towards well-being mean that a degrowth strategy does not necessarily have to be political suicide

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

The currency message from BRICS leaders amarynth

To calm shattered nerves in the west, the message is out: BRICS is not floating a new currency; BRICS is providing alternative economic structures and systems (and currencies) to trade with one another....

Michael Hudson noted three challenging points — foreign debt exposure, economic rent extraction, and the need to raise living standards and labor productivity….

 Indonesia, the fourth most populous nation, is now also a member of BRICS. 

Global South

The currency message from BRICS leaders

amarynth

Russia says it's using bitcoin to evade sanctions — Dan Primack

The bottom line: This development could create a challenge for President-elect Trump, who is both a crypto convert and advocate for U.S. dollar dominance.

Axios
Russia says it's using bitcoin to evade sanctions
Dan Primack

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