So last week, the Bank of Japan remained the last bank standing, the rest in the advanced world have largely lost the plot by thinking that raising interest rates significantly will reduce the global inflationary pressures that are being driven by on-going supply disruptions arising from the pandemic, the noncompetitive behaviour of the OPEC oil cartel and the Russian assault on Ukraine. The most recent central bank to buckle is the ECB, which last week raised interest rates by 50 basis point, apparently to fight inflation. But the ECB did it with a twist. On the one hand, the rate hike was very mainstream and based on the same defective reasoning that engulfs mainstream macroeconomics. But on the other hand, they introduced a new version of their government bond-buying programs, which the mainstream would call ‘money printing’ and inflationary. So, contradiction reigns supreme in the Eurozone and that is because of the dysfunctional monetary architecture that the neoliberals put in place in the 1990s. The only way the common currency can survive is if the ECB continues to fund Member State deficits, even if they play the charade that they are doing something different. Hilarious....
Bill Mitchell – billy blog
Once again the so-called technocracy that is the Eurozone looks like a farce
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
8 comments:
If the BOJ pays IOR, maybe the BOJ has been at zero so long that if they raise then even if they try to do the Fed’s proposed “deferred asset” the asset value could never be greater than the losses the BOJ would realize so they CANNOT increase the policy rate…
NATO was unpopular in Ukraine until Russia invaded in 2014 - https://www.ponarseurasia.org/the-demise-of-ukraine-s-eurasian-vector-and-the-rise-of-pro-nato-sentiment/
Ukraine's treaty obligations to Russia would have prevented NATO membership for decades. In violating those obligations by invading the country in 2014 and 2022, Russia made the alliance seem necessary to Ukrainians.
The 2022 invasion persuaded Swedes and Finns that their countries should join NATO. Putin says that this does not matter -- although Finland has a long border with Russia, the two militaries are quite significant, and decades of neutrality have now come to an end. There is a simple reason for this reaction: Putin is not actually afraid of a NATO invasion of Russia, and never has been. He simply wants to conquer Ukraine, and a reference to NATO was one form of rhetorical cover for his colonial venture. Indeed, Russia is now withdrawing troops from the Finnish border (the future NATO border) so that they can fight in Ukraine.
When they set up the EU they didn’t want this thriving, open, democratic, entity, that would create full employment.
They wanted the real power that stretched from London to the East to be as undemocratic as possible Where real power was in a few hands that never had to face the ballot box. Introduced an economic system that made sure all member states could be kept in line. Wheeled out faces at election time that represented that real power and their geopolitical goals.
If you start from the viewpoint that of course they know MMT and how different monetary systems work. History is littered with examples that they do. Then it is obvious that geopolitics drives everything. The Euro was clearly designed like Sterling in the British Empire and the French CAC in Africa. It is a colonial currency made for colonialism hitched on the back of free trade, private shareholders and austerity. Today’s version of the gold standard.
Countries within the EU are about as democratic as they were during the Roman empire. Brussels is the new Rome.
Wherever you decide to go on holiday visit a museum and you will find coinage. Of those who ruled the waves. Greek, Viking, Roman, Portuguese, Dutch, French and British.
Study how they used these coins. Exactly like Warren says they did, to get conquered nations to work for them and steal their real resources from which to extract rent. Whilst protecting the most profitable trade routes.
The Euro is no different. The coin is the geopolitical tool from which you can steal another nations real resources but you need real power and a debtors prison to make it work.
The ECB is the trade union of the bond holders and the rent seekers. That look after their trade union membership. NATO fits it like a glove and has been specifically designed to do so. Treaties, charters, no difference, they are the same thing delivering the same message.
Because of MMT, when I visit a museum I go straight to the coinage section. Look at the different coinage and the dates. Then challenge myself to try and piece together the history of the island I’m on or country I’m in. Then I go back to the start of the museum and walk through it to see if I am right.
Pester the life out of them to make sure there are no coins through the back that are not in show.
Cyprus. Go to Cyprus you will have fun working that one out.
A million different rulers spanning over many years lol.
:)
When you cross the border in Cyprus you can hear the star wars theme tune in your head.
:)
“ The ECB is the trade union of the bond holders and the rent seekers.”
lol the ECB owns all the bonds….
2022 taught us that power in the EU actually resides in Washington, DC.
Brussels is the testing center for self-inflicted gunshots.
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