For a nation that led the world into near-universal use of agile, fiat currency supply, the USA displays an astounding refusal to learn what Americans know. (Did HP ever make any headway on that self-sampling question, or did they just fire the guy who asked?)
Who could have imagined, ~80 years on, that our policy discussions would again be mired in static-asset concepts, instead of the dynamic-value, public-capability, fiat-initiative thinking that got us out of the Depression and allowed us to mobilize and win WWII!
Yet here we are, with boneheaded politicians still spewing total nonsense about fiat currency issuers running out of money, and an infinitely gullible electorate flocking to the Bonfire of the Inanities. A inanity bubble that big can only be fueled by a semantic arms race, where everyone loses coherence.
In the midst of this desert, Art Patten of Symmetry Capital stands out as another oasis of logic. Once can only hope that enough Americans actually read or listen to Art, rather than to the National Enquirer, Larry Summers, or Fox News.
In a recent article, Art rephrases familiar MMT insights in new combinations and new settings, and hopefully recruits additional citizens to rational examination of fiat currency operations.
Here's one particular phrase by Art that caught my eye.
Nicely put, very direct & very succinct. What, after all, does it mean to have a deficit in fiat?
Art continues, quoting Warren Mosler: a sovereign currency is to sovereign "debt" as your checking account is to your savings account. The resulting mix of government liabilities (currency, reserves, and debt) is simply a function of market demands and central bank management of an interest rate target.
In dismissing gold-std thinking about Japan's fiat currency budget, Art continues this way:
"Thanks to the pervasive influence of conventional economic theory, Japan has invented a perpetual economic drag machine, where the net [fiat] supply of Yen-denominated financial assets runs continuously short of demand."
Art continues, quoting Warren Mosler: a sovereign currency is to sovereign "debt" as your checking account is to your savings account. The resulting mix of government liabilities (currency, reserves, and debt) is simply a function of market demands and central bank management of an interest rate target.
In dismissing gold-std thinking about Japan's fiat currency budget, Art continues this way:
"Thanks to the pervasive influence of conventional economic theory, Japan has invented a perpetual economic drag machine, where the net [fiat] supply of Yen-denominated financial assets runs continuously short of demand."
The follies of economics in drag? Who'da thunk. Only on Wall St.!
Again, well put, Art. Leave it to orthodox academics to invent elaborate ways to keep fiat lagging organic demands. It may take a computer to really screw things up, but only an orthodox economist would voluntarily peg public fiat to a ratio lower than organic growth.
While eschewing weight loss, the orthodox nevertheless endorse aggregate capability loss. Why? Simply because a robust Output Gap makes an impressive figure?
Among other things, Art invokes the myth of "Japandra." It's only in application of this name that we may disagree with him. It seems more likely that something else - perhaps the Conscience of a Jealous Quibbler? - tried to place an orthodox curse on all Virgin Island "Japandras" so that no one would ever believe their MMT predictions. That would explain a lot. Yet even at the ECB, it seems that events have already let the fiat out of The Hague.
Again, well put, Art. Leave it to orthodox academics to invent elaborate ways to keep fiat lagging organic demands. It may take a computer to really screw things up, but only an orthodox economist would voluntarily peg public fiat to a ratio lower than organic growth.
While eschewing weight loss, the orthodox nevertheless endorse aggregate capability loss. Why? Simply because a robust Output Gap makes an impressive figure?
Among other things, Art invokes the myth of "Japandra." It's only in application of this name that we may disagree with him. It seems more likely that something else - perhaps the Conscience of a Jealous Quibbler? - tried to place an orthodox curse on all Virgin Island "Japandras" so that no one would ever believe their MMT predictions. That would explain a lot. Yet even at the ECB, it seems that events have already let the fiat out of The Hague.
Maybe with enough effort, the Pandumbas will finally let their thoughts stray outside their own box? Never heard of Pandumba's Orthodox? Not surprising. They don't get out much, and struggle with emerging operations.
The currency issuers will never run out of money but the sheeple will run out of trust to use the wood chips, if the sheeple perceive the US bills to be Zimbawe style currency. This will happen when there is not enough money left to buy the wares of the 1%, and the reason there is not enough money to buy the wares is because the hidden inflation of perpetual interest payments flowing to the central bank members with no risk involved have sapped the life blood out of real producers from the parasites.
ReplyDeleteCorrection to the last statement of the previous post sorry.
ReplyDeleteThe currency issuers will never run out of money but the sheeple will run out of trust to use the wood chips, if the sheeple perceive the US bills to be Zimbawe style currency. This will happen when there is not enough money left to buy the wares of the 1%, and the reason there is not enough money to buy the wares is because the hidden inflation of perpetual interest payments flowing to the central bank members with no risk involved have sapped the life blood out of real producers.