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...
The capabilities and prerogatives of sovereign currency issuers in comparison with users of the currency is widely misunderstood and unappreciated. This is actually not new knowledge. Amazing that supposed professionals in the field would be unaware of it.
Bill Mitchell – billy blog
Central banks can operate with negative equity forever
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Bill Mitchell – billy blog
Central banks can operate with negative equity forever
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
4 comments:
Fed cannot they are going to use an Accounting scheme of a “deferred asset” to maintain positive equity….
All economics is politics.
“ They show that the so-called ‘quantity theory of money’, used by Monetarists etc, is not functional because “there has not been a stable relationship between monetary aggregates and economic activity or inflation in Australia for several decades”.
But there is NOW … the “money supply!” is up NOW and their “inflation!” is correspondingly up NOW….
So this NOW demonstrates their theory is correct…
Bill is (attempting) to synthesize Socratic with Scientific Method…. These are two separate distinct methodologies…
You can’t synthesize these…
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