I am now seeing more attempts to dig into what exactly happened in the United Kingdom interest rate market. In this article, I am not attempting to do that. Instead, I am just giving a primer on how interest rate swaps are used to hedge liabilities, and what can go wrong when interest rates rise. The mechanisms I describe were likely part of the issue, but I am not saying that this is “the” explanation. Since most people are unsure what liability-driven investment and swaps are, so I am hoping to cover big picture issues for those readers.…Bond Economics
Today’s post will be short. I spent the day mostly doing interviews and ran short on time. I was planning to write about Turkey at some point, but Brian Romanchuk beat me to it. So I’m just going to set things up and encourage you to read what Brian has written....The Lens
There was commentary earlier this week (September 26, 2022) from an investment banker entitled ‘MMT takes a pounding’. I won’t link to it because I don’t want to send traffic to their site. But it is the narrative that the financial market commentators who desire to politicise public debate and use it to attack their pet hates. Modern Monetary Theory (MMT) apparently is a pet hate of this character and like many with similar biases he has been champing at the bit for some semblance of ‘evidence’ that MMT analysis is flawed. This week’s events in Britain have given them more succour. Except when you understand what has actually happened the events demonstrate key MMT propositions....Bill Mitchell – billy blog
I have not seen too many longer articles about the “gilt crisis” in the United Kingdom, but have seen a variety of reactions on Twitter. My reaction is that the discussions reminded me why I mainly followed people who used the title “rates forecaster” and not “economist” when I was in finance. (The “rates forecasters” might have had economics degrees, but they knew that if they wanted people like me to take them seriously, they needed to not sound like the people with “economist” in their title.) It is rather impressive how the most interesting part of this crisis has been buried....Bond Economics
The higher rates provide higher risk free income to critical USD accounts.
This is and will turn out to be a better policy than the MMT policy of permanent ZIRP with current institutional arrangements of ERISA.
A drawback of the policy adjustment though has been the severe reduction in NPV of all financial assets of moving it from 0.05% in March to the projected 4.5% in December… 9 months…
A 10-yr asset would project a 35% reduction in NPV due to an immediate adjustment from 0 to 4.5%… so with a 9 month adjustment period we perhaps see a bit less than this…
They should have done this a lot slower over multiple years for a more stable outcome for financial assets… but we ofc have Art degree morons in there trying to run it and reduce their figurative “inflation!” so there’s going to be chaos…
Higher rates have helped U.S. corp pension plans get to fully funded status; funded ratio of 100 largest corp DB pension plans increased to 106.4% in August, jumping further out of sub-100% territory during post-GFC era
— Liz Ann Sonders (@LizAnnSonders) September 28, 2022
@Bloomberg @millimaninsight pic.twitter.com/W0cTSM1HYP
It’s Wednesday and I am now ensconced in Kyoto, Japan for the months ahead. I will report on various aspects of that experience as time passes. Today, I reflect on a debate that is going on in Australia about the situation facing live musicians. Should promoters be able to employ them for poverty wages including ‘nothing’ while still profiting or should they be forced to pay the musicians a living wage. You can guess where I sit in the debate.…
We can change that to, "Everyone should be paid a living wage." Then we could have a debate over the various ways to accomplish this.
Bill goes on to say this.
My position is clear – any worker should be paid a living wage at a minimum.
Bond markets are finally getting interesting, with the Bank of England launching emergency purchases to restore order in the gilt market. Since I am not in constant contact with people trading gilts, I will just offer a tentative description of what seems to be going on, and what it “really means.”...Bond Economics
- The leakages and explosions at the Nord Stream and Nord Stream 2 pipelines take the European energy crisis to another level.
- Analysts are worried that the leakages and explosions on both lines are not an incident but linked to the launch of the Baltic Pipe.
- A disruption of Norwegian energy supplies to the European Union or the UK could lead to faster depletion of natural gas storage facilities in Europe this winter.
I was passed a link to the paper “Exchange Rate and Inflation under Weak Monetary Policy: Turkey Verifes Theory” by Gürkaynak, Refet S. and Kısacıkoğlu, Burçin and Lee, Sang Seok. (They used Turkey, and not the apparently preferred Türkiye.) It was claimed by a well known blowhard economist to tell us something about MMT — but to be clear, that was an assertion by someone who makes a living by being wrong about macroeconomics, and not the authors of the paper. Although it has some relevance to some debates about MMT, it is a stretch to say that is telling us much that is useful.…Bond Economics
Today, I am skipping my Japanese language class and heading to the airport. I am taking up a position at Kyoto University under a JSPS Invitational Fellowship. I am working with the team in the Resilience Unit there on a project studying the design of fiscal policy for building national resilience using Modern Monetary Theory (MMT) principles. Resilience is an important part of the degrowth and deep adaptation agenda and I will spend some months there working on with other researchers. The – Japan Society for the Promotion of Science (JSPS) is ‘Japan’s sole independent funding agency dedicated to the advancement of science’ and is overseen by the Ministry of Education, Culture, Sports, Science and Technology. I am very privileged to receive one of the invitations. So from tomorrow I will be in Kyoto and depending on commitments my blog posts might be a little less regular although I think I will be able to continue the usual output. Now, it is time to put my Tuesday languages class into action – along with Google translate! Some travelling music follows....Bill Mitchell – billy blog
No bueno….
Just three legislative days remain before funding runs out. https://t.co/xUQPZtzF10
— ABC News (@ABC) September 26, 2022
Everyone insisted that the Bank of England (BoE) needed to say something following the financial turmoil that began on Friday and continued over the weekend. The BoE has now spoken. Sounds pretty dovish to me....
Actually, the Bank concludes with, "accordingly. The MPC will not hesitate to change interest rates by as much as needed to return inflation to the 2% target sustainably in the medium term, in line with in its remit." (emphasis added). This is not all that "dovish." The BoE is saying it will act aggressively through monetary policy, which markets generally want to hear.
This is an example of single-variable-in a-linear-equation thinking, which is the basis of contemporary monetarism. This hypothesis (in a discredited theory) is that the interest rate set by the central bank as the independent variable determines the inflation rate as dependent variable in a linear function. While it is not a directly linear relationship owing to "friction," monetary policy is assumed to work with some unforeseeable lag as it works through the system (the same assumption as sanctions).
Single-variable thinking when dealing with complex adaptive systems like socio-economic systems is a logical fallacy underlying a "dogwhistle" or "meme" cognitive-affective bias. Central banks use it to influence expectations. It is a fallacy since, as Keynes observed, many more causal variable as involved as well as shifting circumstances, some of which are unforeseeable owing to emergence in a complex adaptive system. The number of variable and their relationships are unknown (epistemological uncertainty) and the emergence cannot be known from the initial conditions (ontological uncertainty).
The question is whether central bankers know this is a just dogwhistle that will influence the market even though there is little substance to it, or they actually think it works as assumed.
The LensThe LensCut taxes. Cry Broke. Defund the public sector....
GOP has goaded the Dems to sacrifice the current benefit to their political party in a defense of the Platonist theory of Monetarism…
"74% of Americans say that the economy is in a bad state right now — and not only that, you have independents thinking Republicans would do a better job handling the economy," says ABC's Rachel Scott.
— RNC Research (@RNCResearch) September 25, 2022
"That all points to an extraordinary set of challenges for Democrats." pic.twitter.com/3fZnAti2sj
The public debate is conditioned by who gets a platform in the mainstream media. Even those publications that purport to be informed and appeal to a more reasoned type of reader are highly selective in who they give a voice to. I see this as a huge constraint in advancing alternative ideas that challenge the mainstream narrative and the vested interests that support it. The problem is that on economic matters these vested interests have not only captured what we might call the conservative voice. They also dominate and craft the so-called progressive agenda such that Green groups and movements, for example, are indistinguishable on macroeconomic matters, which makes it hard to contest ideas that are abroad. The UK Guardian, for example, thinks it presents a progressive angle on issues and is ‘above’ the crudity of the tabloids. But it regularly gives voice to writers who promote macroeconomic fictions and refuse to give space to those who challenge these fictions. Today (September 26, 2022) for example, it published am article – Without radical tax reform, Australia faces an insoluble public finance problem – by one Satyajit Das, who gets regular Op Ed columns in the Guardian and appears regularly on Australian public radio. His analysis distorts the public debate. Selective platforming is a blight in our media....
This morning, I went (back) down the rabbit hole on the sterling crisis that supposedly drove the British government into the arms of the IMF in 1976. I’m not a historian of British economic history, but other MMT economists (and some non-economist MMT scholars) have written at length about the period. And I mean at length.…
It’s one thing when a bombastic TV personality goes on a mini-rant about “printing money” but it’s another when fellow scholars and academics go along with the misrepresentation of MMT. Pointing to some basket case economy—the Weimar Republic, Zimbabwe, Argentina, Venezuela, Sri Lanka, Turkey, or even the UK—and squawking about MMT might make for entertaining television, but you’re telling on yourself when you demonstrate such willful ignorance....How much is due to ignorance and how much about attacking a challenge to the conventional narrative?
Credit Suisse's annual Global Wealth Report.
- Credit Suisse found China's median wealth outpaced Europe's in its 2021 Global Wealth Report.
- The average Chinese citizen has a wealth of $26,752, around $60 more than the average European.
- Chinese wealth has surged in the past two decades, with median wealth per adult growing more than eight-fold.
China shifts US bond holdings offshore, potentially beyond the reach of any future currency sanctions, report
- China cut US debt holdings by 9% from the end of 2021 to July this year, according to Nikkei Asia.
- Meanwhile, the Cayman Islands saw a $38.5 billion rise in China's Treasury holdings, and Bermuda saw a $7 billion increase.
- China may be protecting dollar-denominated assets from any future sanctions like the kind that froze Russia's foreign currencies.
Liz Truss perhaps looking to do a Trump/Erdogon style smack down on the BOEs monetarist morons…
Boris Johnson's likely successor wants to review the Bank of England's mandate. And some are worried https://t.co/HbQx08y8p0
— The News with Shepard Smith (@thenewsoncnbc) August 31, 2022
Effect on 10 year financial asset prices of dumb monetarist Democrat people directing their dumb monetarist central bank people to increase the risk free policy rate to “fight inflation!” due to the goading of dumb monetarist GOP people whereby the US 10-yr this year goes from 1.6% in January to now 3.7% yesterday:
1.6%
3.7%
Same financial asset, price falls from 853 to 695 or about a 18.5% reduction… simply due to an adjustment in govt interest rate policy no “inflation!” fairy responsible or wtf these deranged monetarist morons brains can conjure up for them…
This policy adjustment has a similar effect on all financial assets stocks, bonds, CRE, annuities, etc… so here we are…
MAGA victory lap…. monetarist GOP 100% goaded the monetarist Democrats into trashing the US financial economy now a month before the midterms… UFB how dumb the Democrats are…
Yesterday, I wrote about so-called “Trussonomics,” asking, “Can Liz Truss Do It?” We had some idea what “it” was, but we have a clearer picture with the release of today’s so-called mini-budget.…The Lens
I normally stay away from commentary on budget statements, in that the analysis is mainly political in nature. In recent decades, the macro fiscal effects tended to be tepid and over-rated for political reasons. (The pandemic measures are the glaring exception, however, they were often enacted as stand alone measures and not part of the normal budgeting process. The same holds for the various fiscal measures enacted in 2008.) The recent “mini-budget” in the United Kingdom threw away that timidity. Since I have not been following the area closely, I will point you to Duncan Weldon’s piece, and offer a more theoretical response....Bond Economics
The global press is full of stories lately about how central banks are taking big losses and risking solvency and then analysing the dire consequences of government bailouts of the said banks. All preposterous nonsense of course. It would be like daily news stories about the threat of ships falling off the edge of the earth. But then we know better than that. But in the economic commentariat there are plenty of flat earthers for sure. Some day, humanity (if it survives) will look back on this period and wonder how their predecessors could have been so ignorant of basic logic and facts. What a stupid bunch those 2022 humans really were...
It’s Wednesday and as usual I just present some short snippets that have attracted my attention this week and other things that distract me from economics. Today, we don’t talk about the British royalty at all – the events this week were from another world really. But what is not from another world is the continual nonsense being spoken and written about this inflationary period and how central banks and treasuries have to tighten up to ‘beat it’. Talk about anachronism. And once we have discussed those things, I offer some soothing music to reduce the state of angst....
Real resources and supply.
Stephanie Kelton's introduction and Dan Alpert's analysis.Peter Radford takes down the "economic science profession."
As an academic, I approach the issue somewhat differently. There is nothing inherently "wrong" about specialization and methodological choices. The problem arises begins with naming and extends to capture of an epistemological territory.
Conventional "economics" has managed to capture an academic field based not on more successful explanation but rather as a result of acquiring the power to sideline competitors, some of whom have been more successful in explanation. This is done by enforcing particular methodological rules on the specious justification that they have proven "superior" and "that the debate is now over."
"Let a hundred flowers bloom." If mathematicians want to pursue the study of economic modeling, why not? But to regard that approach as justifiably exclusive and to manage to impose it through power relationships is madness from the intellectual point of view. Of course, it is highly rewarding from the stance of economics, since it leaves all the choice positions in academic and related fields involving economic advice in the hands of those wielding the power as a group.
It is well-known how at the time of the financial crisis the then reigning queen asked her majesty's economists how they had all missed its onset. But nothing has changed.
The Radford Free PressIn early August, I made the following observation. Reading the replies, I noticed that a handful of people thought I was claiming that a cabal of global elites was engaged in some backroom conspiracy to join in a collective effort to crush the proletariat. I wasn’t. What I was actually saying was that policymakers were (nearly) all leaning hard in the same direction at the same moment in time—tightening both fiscal and monetary policy—and that the predictable outcome would be a synchronized contraction....The Lens
The Market is servant, not master because Sterling is a public monopoly and monopoly rules apply. Whether the government pays interest is entirely a policy choice. There is no reason at all for government to continue to issue Gilts or Treasury Bills, nor pay interest on them. Stopping interest payments will eliminate the interest income and forward pricing channels, causing inflation to decline faster. Moreover, it would make the implementation of a Central Bank Digital Currency that much easier. After all, there are no interest payments on physical cash. So why should there be any with digital cash?New Wayland
I have been looking at The Moorad Choudry Anthology: Past, Present and Future Principles of Banking and Finance (Amazon affiliate link, and as the title suggests, by Moorad Choudhry) as a source for my banking primer. Professor Choudhry teaches in the M.Sc. Finance at the University of Kent Business school, and previously worked in a bank treasury department. The book is impressive, clocking in at 1252 pages (not counting end matter). As an academic text, it is not cheap, but is a good source for getting a handle on banking.
My primer is aimed more at the macroeconomic aspects of banking, and would be a lot shorter (and cheaper). However, my plan is to lean on the Anthology for more complex topics.
In this article, I just want to highlight parts of Choudhry’s discussion of bank treasury operations....
I remember a conversation I had when I was picked up hitch hiking to Melbourne from where I was living down the coast. It was during the 1970s inflationary period, which had morphed into stagflation as a result of deliberate government policy to create unemployment and discipline the wage-price spiral. The driver was a manual worker and during a conversation about the state of the economy (I was studying economics at the time) he said “the government should care about employment because at least then everyone has a job even if prices are rising”. That conversation stuck with me because it summed up what research shows in more sophisticated ways – the costs of inflation are minimal when compared to the devastating costs of unemployment. At present, our policy makers are unwilling to recognise that reality because it is not them that bear the costs.
(Commentary posted by Roger Erickson.)
The Greater Eurasian Partnership was proposed by Putin in 2015 – and it’s getting sharper as the EAEU commission, led by Sergey Glazyev, actively designs a new financial system, based on gold and natural resources and counter-acting the Bretton Woods system. Once the new framework is ready to be tested, the key disseminator is likely to be the SCO.
So here we see in play the full cohesion of goals – and the interaction mechanisms – deployed by the Greater Eurasia Partnership, BRI, EAEU, SCO, BRICS+ and the INSTC. It’s a titanic struggle to unite all these organizations and take into account the geoeconomic priorities of each member and associate partner, but that’s exactly what’s happening, at breakneck speed.
In this connectivity feast, practical imperatives range from fighting local bottlenecks to setting up complex multi-party corridors – from the Caucasus to Central Asia, from Iran to India, everything discussed in multiple roundtables.
It is common for politicians and pundit types to speculate on when or whether China’s economy will pass the US economy as the world’s largest. The latest episode to cross my path was a column by David Wallace in the New York Times.
There is little reason for this sort of speculation. China is already the world’s largest economy, its economy is more than 20 percent larger than the US economy, according to the IMF. Furthermore, it is growing considerably more rapidly (assuming they don’t continue their zero COVID-19 policy forever), so it is projected to be more than a third larger than the US economy by the end of the decade....
Of course, the story is different in terms of per capita wealth and income. The Chinese economy is larger than the US economy largely for the reason that China has been playing catch-up and its population is several times as large the US population so even with modest output the economy is greater. China's aim now is to equal and eventually surpass the West in distributed prosperity through a socio-economic system that China regards as superior to the West's. But on a global scale, China is still a relatively poor country over all, with still a significant rural peasantry.
Real-World Economics Review BlogWhile some may wish to assert without evidence that [Sergey Glazyev] is a “follower of Modern Monetary Theory”, the facts from Glazyev’s actions, words and policy orientation attest to a very different reality.
It was for this reason that Glazyev first began meeting Lyndon LaRouche directly during the latter’s many trips to Russia in the 1990s after the young economist had demonstrated his consistent principles by resigning from his post as Minister of Foreign and Economic Relations under Boris Yeltsin in 1993 when it became clear that the intention behind the reforms he was expected to oversee were designed to destroy his nation. In his 1999 book Genocide: Russia and the New World Order, Glazyev laid out the two pathways forward for Russia in the 21st century ….
Yeah, I know, "Lyndon LaRouche." But the subject of this post is Sergei Glazyev and contemporary Russia rather than LaRouche.
Indeed, perhaps more significantly than LaRouche, Glazyev and Michael Hudson are on the same page. In the larger context, this is about global decolonization as the basis of multipolarity in contrast to unipolarity, that is, continuing Western dominance and exploitation. It boils down to socialism as state management for public purpose versus neoliberalism, the current form of capitalism, as state management for private profit that involves state capture by the ruling elite.
This is subcontext of the conflict in Ukraine, for instance, with the Russian leadership now declaring publicly that the US is pursuing world domination and seeks to colonize Russia. This casts the conflict as well as other global events, such as Taiwan and the South China Sea is an overarching geopolitical and geostrategic context, embedded in the world system that is now shifting away from Western dominance and the "the golden billion."
This means a break with neoliberalism, which is joined at the hip with neo-imperialism and neocolonialism, and the institution of a new economic order globally. This is Glazyev's project as it is Michael Hudson. For this reason, both economists are popular with multipolarists.
Matthew Ehret's InsightsThe CPI report in the United States was a horror show for Team Transitory. Although there were other areas with jumpy prices (e.g., food prices), I think that the housing component (above) is the part I am most concerned about in the near run....Bond Economics
It’s Wednesday and today we discuss the latest inflationary expectations data from the US, which tells me that my assessment that this episode will be a transitory phenomenon, diametric to the experience of the 1979s, was sound, despite the flack I have received over the last several months. The data is now showing consistent, cross-month declines in expected inflation and the latest CPI shows an easing of the general CPI pressure. AS the supply chains return to something like pre-pandemic capacities, then the easing will continue. It is too early to say that this period of elevated CPI rises is over but it sure looks like it and wages have barely moved. Once we get our heads around that I provide some information about an interesting ‘golf’ experiment and finish with some great keyboard playing....Bill Mitchell – billy blog
Rather to my surprise, John Glenn’s successor, Richard Fuller, has actually replied to my query on what were the “liquid assets” he originally claimed were ‘backing’ the physical cash issued in notes and coin! But circular reasoning, I’m afraid, seems to sum up Treasury thinking… The copy of the letter is below:Progressive Pulse
The MMTed edX MOOC – Modern Monetary Theory: Economics for the 21st Century – starts tomorrow and enrolments are open. The free, 4-week course will offer a range of learning modes – videos, written materials, interviews with many MMT people, and more. It is designed for the beginner and equips the participant with a broad array of information designed to develop economic literacy....Bill Mitchell – billy blog
Last week, I joined David Westin on Bloomberg TV to talk about what the Federal Reserve and the European Central Bank (ECB) are doing to try to tame inflation. If you’ve been reading this newsletter for a while, then you know that I don’t subscribe to the conventional view that a series of aggressive and indiscriminate rate hikes is the right way to respond to our current bout of high inflation. Indeed, I’ve called it Bad Medicine. It comes with some nasty side effects, and there’s no guarantee it will cure the disease.…
Bill Mitchell – billy blogThe Eurozone is currently in a period of ‘temporary’ hiatus – by which I mean that to deal with the obvious system-ending implications of the pandemic (increasing fiscal deficits etc) the European Commission invoked the special clauses to suspend the application of the fiscal rules outlined in the Stability and Growth Pact (SGP) and related Excessive Deficit Mechanism procedures and the European Central Bank introduced an even larger bond-buying program to ensure the resulting deficits would be funded without bond yields rising. Result: fiscal deficits rose well beyond the SGP limit of 3 per cent in 2020 and have remained at elevated levels relative to the rules in 2021. The overall Eurozone deficit is 4.7 per cent of GDP and 11 of the 19 Member States remain in ‘violation’ of the Excessive Deficit Mechansim should that be reinvoked. It is clear that unless the ECB continues funding the deficits across the union (even though it claims otherwise), then the European Commission will tempt disaster if it tries to reassert the Excessive Deficit Mechansim. Already so-called ‘reform’ proposals are emerging and many more will come in the months ahead. The first major effort from the IMF is really just more of the same and fails to deal with the dysfunction at the design level of the monetary union. The proposals so far are just advocating putting band-aids over the mess – and they are weak bandages at best. But how this dilemma is resolved will be interesting for sure.
The debate is now moving to what should the European Commission and the Member States do now with respect to the fiscal rules....
Economist Michael Hudson joins Multipolarista host Ben Norton to discuss partial student debt relief in the US, inflation and the Fed, disaster capitalism in Ukraine, and China’s challenge to the petrodollar.
This is gotta be fake news.. these young people REALLY would rather be going to the Arctic and freezing their asses off….
#Ukraine war zone. My heart bleeds for their suffering in Kiev. pic.twitter.com/9kwPNiXLoy
— It's a hoax folks🇮🇪 (@valeriekeane53) September 4, 2022
😂😂😂😂😂
Initial effect of the increase in the risk free interest rate component of Fed monetary policy to fight Art Degree figure of speech “inflation!” has wiped out over $6T of wealth in 90 days… Accordingly most people are bearish NOW…
The hit to Household Net Worth over the last 2 quarters is beyond even that of the GFC. Reverse Wealth Effect about to work with a vengeance. #Recession #Crisis pic.twitter.com/0lFzY3kVcy
— steph pomboy (@spomboy) September 9, 2022
This is Part 2 of a series on Deep Adaptation and MMT that I am writing. The first part – Deep Adaptation – Part 1 (August 22, 2022) – introduced the concept. I have recently written about the coming together of a number of crises which I consider to be all linked and part of the end of normal business as we have known it. See – The global poly crisis is the culmination of the absurdity of neoliberalism (July 18, 2022). Thinking about the social aspects of that conjunction of crises, we understand that advancing material prosperity is still a goal that we should seek to achieve for millions of the globe’s citizens, who live in abject poverty with little food and housing security. But then, when we consider the ecological dimension we see immediately how the social goals have to be solved within a constrained envelope of overall material deprivation. The question then is how can we move forward towards achieving that duality. There are various propositions out there – Green New Deals, Green Growth, etc. I think they are all flawed and that proponents tend to become captured by the power relations that have created the current mess. That is where I think the concept of Deep Adaptation comes into play. Which brings me to a starting point in understanding where these institutionalised ‘green’ conservations have lost their way. Today, I am writing about growth and degrowth, because there are a lot of misunderstandings out there about this apparent conflict....Bill Mitchell – billy blog
Euthanize all the Art Degree climate nutters and a lot of the current problems immediately go away….
The moratorium on fracking, in place since 2019, will be scrapped on Thursday, giving the green light for companies to seek planning permission to drill for shale gas in the UK.https://t.co/jL5HEb7OWv
— Disclose.tv (@disclosetv) September 7, 2022
Both the Far East and the Arctic Region not only have key resources, but also access to rapidly developing regions of the globe, Russian President Vladimir Putin said at the plenary session of the Eastern Economic Forum (EEF).
"As far as we are concerned, the Far East and the Arctic are definitely the most important regions for Russia’s future. Not only do they have resources there, but it also offers access to areas of the world proactively developing and at a very good pace. We actually started building up the Far East not due to any sort of special military operation in Donbass, this was done long before that. It is a strategic choice based on the global economy’s development trends, and, accordingly, the emergence of new centers of power in the world," the president said. According to Putin, you have to "keep up with the trends" and work to develop contacts with other regions of the world.…
The large gains over this century will come from developing areas — Asia, especially including Central and Southeast Asia (Indonesia), Africa, and Latin America. This is a reflection of growing multipolarity (decolonizataion).
TASS (Russian state media)Russia will stop supplying all energy products to Europe if the EU and its Western allies impose price caps on Russian oil and natural gas, Russian President Vladimir Putin said on Wednesday.
Oil.
India PunchlineBank reserves feature prominently in Economics 101 discussions of banking. As is entirely typical for Economics 101 macroeconomics, the topic is either taught incorrectly or in a misleading fashion. Bank reserves — better referred to as “settlement balances” — are just private sector bank deposits at the central bank. If you know what a bank deposit is, you know what a “bank reserve” is....Bond Economics
Is money precious and scarce, necessitating iron fiscal discipline? Must the government always balance the books or risk ruin? Or is money, in fact, a flexible tool that can be used to mobilize our collective resources to serve those who need them?
In this book, leading Modern Money Theory (MMT) advocate Randy Wray explains that the only real constraints on public policy are physical resources, technological capacity and political will: but never money. He shows how modern sovereign governments spend by keystroking money to bank accounts. While taxes serve other important purposes, they do not – contrary to popular belief – fund spending. If we recognize this, and totally reframe how we think about money and debt, we can marshal our national wealth to make us all richer, eliminate unemployment and “look after our own.” We can make money work for us – the US.
This book's account shows how MMT can become a new American political and economic orthodoxy, replacing the dominant conservative framework forever. It is essential reading for all progressives.
In 2021 I put out a working paper with my simple mathematical model that illustrated MMT’s theory of the determination of the price level. You can read the paper here, or an earlier version of the model in a blog post here. Then at the 2nd MMT Summer School in Poznań, none other than Steve Keen did a demo of his Minsky modeling software, and it occurred to me that it would be fairly easy to set up my model in Minsky. So I did it, and I’m going to show you the results in this post.Sam Levy — Medium
A word of warning: this is not going to be an introduction either to the model, or to the Minsky software. So, my apologies, but this post is for a bit of a niche audience! If you want to get all the details here, then I’d encourage you to read about the model first, and maybe watch a few minutes of one of Steve’s video demos of Minsky. My primary purpose I’d say is to review my experience with using Minsky, and also to note a few changes I made to the model since its last edition....
On this subject I’ve read rumours – and no more than that – that the Truss regime would like to separate the Treasury from Economic Affairs – as, similarly for a short time, in Harold Wilson’s administration…It appears that governments may be backing themselves into the (MMT) view that it is the government that creates its currency through the central bank and doesn't have to obtain it from anywhere because there is nowhere else the currency originates. Governments spend first and then tax, not vice versa as the story goes.
That would. I think, be rather a good idea.
We’d have an economic plan.
And then it would be up to the Treasury to deliver it.
An economic plan rather than a money plan.
Because money is of course, created by government at will, in order to get things done....
The message is loud and clear: Saudi Arabia and Russia who form the axis of the OPEC+ are closely coordinating on shaping the world oil market even as they could be competing for market share....
Bad news for the West.
India PunchlineThe chances of a G7 price cap on Russian oil being remotely effective are perhaps best summed up by a recent tweet from a Bloomberg energy and commodities columnist: “My friends and I have agreed to impose a price cap on our local pub's beer. Mind we actually do not plan to drink any beer there. The pub's owner says he won't sell beer to anyone observing the cap, so other patrons, who drink a lot there, say they aren't joining the cap. Success.”OilpriceWhy The Russian Oil Price Cap Won’t Work
Rich countries run the world economy. They are represented mainly by the G7 – the US, UK, Germany, France, Italy, Japan and Canada – and directly manage all major international bodies or greatly influence how these work. In the process, they set the terms for international trade and investment. Any country that disobeys their US-led ‘rules-based order’ is faced with sanctions, economic isolation and military threats. But the past six months has seen accelerating moves to build a framework outside this web of domination. This article assesses those building blocks for a new world economy....
I won’t go further into the myriad of proposals coming from the UK government, the opposition Labour party and various think-tanks about how to relieve or avoid the catastrophe ahead for millions of households in Europe and particularly the UK. I won’t because there is one thing that they all have in common – there are no proposals to end the market for energy prices or to bring into common ownership the energy companies, retail, distribution and wholesale (the UK TUC proposes nationalization of retail only). To do so would require a revolutionary transformation of the structure of economies starting with energy..…Michael Roberts Blog — blogging from a marxist economist
