Saturday, October 1, 2022

Busting The Deficit Myth Featuring Dr. Stephanie Kelton — Thom Hartmann (video 12:16)



Video  (12:16), no transcript. Good short intro. Pass it on.

The Thom Hartmann Program
Busting The Deficit Myth Featuring Dr. Stephanie Kelton
Thom Hartmann interviews 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

Friday, September 30, 2022

Primer: Basics Of A Swap Meltdown — Brian Romanchuk

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
Primer: Basics Of A Swap Meltdown
Brian Romanchuk



Thursday, September 29, 2022

Let's Talk Turkey Stephanie Kelton

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
Let's Talk Turkey [which now prefers to be called by it official name, Tūrkiye]
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

Bill Mitchell — The last week in Britain demonstrates key MMT propositions

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
The last week in Britain demonstrates key MMT propositions
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

The "gilt crisis" — Brian Romanchuk

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 "gilt crisis"
Brian Romanchuk

Benefit of higher risk free rate


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…




Wednesday, September 28, 2022

A Wonky (But Worthwhile) Read — Stephanie Kelton

Link to Randy Wray's "Monetary Policy: An Institutionalist Approach" as an antidote to the poison of monetarism and its policy application.

The Lens
A Wonky (But Worthwhile) Read
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

Bill Mitchell — Musicians should be paid at least a socially inclusive minimum living wage

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.

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

Gilt Market Mayhem! — Brian Romanchuk

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
Gilt Market Mayhem!
Brian Romanchuk

Tuesday, September 27, 2022

European Energy Security Faces New Risks With Nord Stream Explosions — Cyril Widdershoven

  • 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.
Taking economic warfare to a new level.

Oilprice
European Energy Security Faces New Risks With Nord Stream Explosions
Cyril Widdershoven

Should We Be Raising Taxes to Fight Inflation? — Stephanie Kelton

Some specifics about the MMT position on addressing inflationary pressure based on analysis of relevant causal factors — albeit without details owing to the scope of a post. For example, there are demand side reasons for rising inflationary pressure and also supply side. Stephanie Kelton claims that the predominant causal factors now are supply side and so addressing the issue from side of demand is the wrong approach, whereas expanding supply where there are shortfalls and bottlenecks is the way to go.

Raising taxes to fight inflation is a single-variable approach based on addressing the demand side and as such it is simplistic. "Raising taxes" is not the preferred MMT solution to inflation although in some cases it is indicated. When it is, then the specifics of tax policy to reduce demand become crucial.

While she doesn't address it specifically, a systems approach is called for. "The economy" is embedded in a socio-economic system and this means that the issues involved in economics are not purely economic but include the social and political, which brings in values and involves ideology in addition to purely economic considerations. Therefore, "show me the bill" to be submitted to the legislature for a vote becomes more important than "show me the (economic) model."

The Lens
Should We Be Raising Taxes to Fight Inflation?
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

Paper On Türkiye — Brian Romanchuk

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
Paper On Türkiye
Brian Romanchuk

Monday, September 26, 2022

Bill Mitchell – Off to Japan I go

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

Government shutdown looms

 

No bueno….





How Donald Trump got his Deutsche Bank loans — Nate DiCamillo & Scott Nover

The title should contain "allegedly." The facts will likely be decided in court.

Quartz
How Donald Trump got his Deutsche Bank loans
Nate DiCamillo & Scott Nover

Zero Hedge— 'Black' Monday 2.0

Numbers.

Zero Hedge
'Black' Monday 2.0
Tyler Durden

Moon of Alabama — The U.S. Is Winning Its War On Europe's Industries And People

Relies on Michael Hudson's economic analysis.

Moon of Alabama
The U.S. Is Winning Its War On Europe's Industries And People
b

The Bank of England Had to Say Something — Stephanie Kelton

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 Lens
The Bank of England Had to Say Something
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 Oldest Trick in the Book — Stephanie Kelton

Cut taxes. Cry Broke. Defund the public sector....
The Lens
The Oldest Trick in the Book
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 EU is sleepwalking into anarchy — Thomas Fazi

The economic situation in Europa resulting from not thinking sanctions through failure to take the availability of real resources sufficiently into account, and lack of awareness of the national and global economies as subsystems in the world system. Since the world system is complex adaptive system, it's complicated. Now they are lost in a maze of their own construction.

Thomas Fazi is the co-author with Bill Mitchell of Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World  (Pluto Press, 2017),

Unherd
The EU is sleepwalking into anarchy
Thomas Fazi

See also

Evonomics (10 Sep 2022)

#duh


GOP has goaded the Dems to sacrifice the current benefit to their political party in a defense of the Platonist theory of Monetarism…  





Sunday, September 25, 2022

Tax reform in Australia is needed but not because the government needs more of its own currency to spend — Bill Mitchell

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....
Media capture is essential to narrative control. Since overt government censorship is ruled out in liberal democracies, other means need to be adopted, and they have been.

Bill Mitchell – billy blog
Tax reform in Australia is needed but not because the government needs more of its own currency to spend
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Related 

When information is politicized.

A Son of the New American Revolution
Larry Johnson

Can “It” (1976) Happen Again? — Stephanie Kelton

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.…
The Lens
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

Saturday, September 24, 2022

Greatest scene in motion picture history

 

This might be it:





Stallone greatly underrated..



The Infinite Money Glitch — Mike Hassaballa

Positive assessment of MMT, but misinformed on several key points.

DastaDrivenInvestor
The Infinite Money Glitch
Mike Hassaballa

Squawking About MMT — Stephanie Kelton

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?

The Lens
Squawking About MMT
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 typical Chinese adult is now richer than the typical European adult, a new wealth report finds — Jyoti Mann

  • 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.
Credit Suisse's annual Global Wealth Report.
h/t Naked Capitalism

Also at Insider
  • 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.
China shifts US bond holdings offshore, potentially beyond the reach of any future currency sanctions, report
Brian Evans

Also

Further precedent for Russian selling subs and sub technology to China?

Sydney Morning Herald
Australia considering buying first few nuclear submarines from the US instead of building them onshore 
Anthony Galloway

Liz Truss wants to review BOE mandate

 

Liz Truss perhaps looking to do a Trump/Erdogon style smack down on the BOEs monetarist morons…




NPV of 10 year financial asset at 1.6% vs 3.7%


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… 






Friday, September 23, 2022

MAGA: The Dow Jones Is Heading For 25,000

 

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…




The Mini-Budget is a Maxi-Giveaway — Stephanie Kelton

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
The Mini-Budget is a Maxi-Giveaway
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

U.K. Fiscal Policy: Boom — Brian Romanchuk

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
U.K. Fiscal Policy: Boom
Brian Romanchuk

Thursday, September 22, 2022

How the West Poisoned Its Money — Yanis Varoufakis

Interesting article, but it doesn't mention how the West also poisoned its money by politicizing it — weaponizing it really — with sanction.

The article also suggests, although not explicitly, how so-called sound money backed by conversion into a real resource at a fixed rate addresses this issue of cheapening the money. This is may be coming by fixing an international trading vehicle through a basket of commodities, a return to precious metal standard being unlikely.

Project Syndicate (free registration may be required)
How the West Poisoned Its Money
Yanis Varoufakis

War and Industrial Policy — Zoltan Pozsar

I just ran into this note by Zoltan Pozsar. It's a month old but still highly relevant. He sees the world changing from a peacetime economy to a wartime economy with all that implies for the world system with regard to supply chains, etc. Events that have transpired since the note appeared confirm this view, especially with Russia now openly in conflict with NATO and Biden's removal of strategic ambiguity regarding the US defending Taiwan in the event of a Chinese incursion. Get ready for it.

Credit Suisse
War and Industrial Policy
Zoltan Pozsar

Bill Mitchell — Central banks can operate with negative equity forever

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

Wednesday, September 21, 2022

One-Variable Guy — Scott Adams

Copyrighted cartoon at link.

Dilbert
One-Variable Guy
Scott Adams

Bill Mitchell — Dangerous anachronisms continue – and I am not talking about the British royalty

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....
Bill Mitchell – billy blog
Dangerous anachronisms continue – and I am not talking about the British royalty
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Tuesday, September 20, 2022

Talking Energy and Inflation with Westwood Capital's Dan Alpert — Stephanie Kelton

 Real resources and supply.

Stephanie Kelton's introduction and Dan Alpert's analysis.

The Lens
Talking Energy and Inflation with Westwood Capital's Dan Alpert
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

Experts Explain How Germany's Anti-Russia Sanctions Threaten India With Food Crisis — Rishikesh Kumar

It's complicated. This is what happens when not thinking complicated issues through before taking action. This will just hasten the process of decolonization.

Sputnik International (Russian state-sponsored media)
Experts Explain How Germany's Anti-Russia Sanctions Threaten India With Food Crisis
Rishikesh Kumar

See also at SI

India Facing Tough Decision Over Fate of World's Largest Free Food Program

Guterres: It's 'Essential' to Remove Obstacles to Export of Russian Fertilizers

EU Wastes More Food Than It Imports, Report Says


The Price of Economics — Peter Radford

 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 Press
The Price of Economics
Peter Radford

Monday, September 19, 2022

Deliberate. Coordinated. Global Recession. — Stephanie Kelton

In 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
Deliberate. Coordinated. Global Recession.
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

HM Treasury sets the price, not The Market — NeilW

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
HM Treasury sets the price, not The Market
NeilW

Primer: Bank Treasury Operations — Brian Romanchuk

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....
Bond Economics
Primer: Bank Treasury Operations
Brian Romanchuk

Sunday, September 18, 2022

Bill Mitchell — Central bank priorities are not the priorities of working people

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.
The is what central bank independence is really about. Being unelected and therefore unaccountable, the central bankers give politicians cover for policy for which voters would otherwise hold them to account. The system is designed this way for a political purpose while the reason for central bank independence is advertised as taking the politics out of it. That is exactly the problem. It is a centralized command system.

Compounding the problem is the fact that central bankers don't understand the institutional basis of the monetary system adequately. In addition, they not only don't understand it, they misunderstand it and use an approach based on monetarism, which fundamentally flawed.

Bill Mitchell – billy blog
Central bank priorities are not the priorities of working people
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

The Odds of a Bad Outcome are Rising — Stephanie Kelton

Contra Larry Summers.

The Lens
The Odds of a Bad Outcome are Rising
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

Saturday, September 17, 2022

The Recent History of "at will" MASS DELUSION events

   (Commentary posted by Roger Erickson.)


What are Mass Delusion events?  They are simply the institutional momentum of freedback waves traveling through a communicating network, and they can appear in diverse forms. They are the sum of communicability, shared relevance, emotional appeal, and underlying conditions, e.g., stress & propensity to panic.  The phenomenon is not new.  Transiently attractive rumors are as old as human culture.

However, the remarkable 20th Century resurgence of the use of Mass Delusion events as tools of Politics and Empire, can be significantly attributed to 3 little books that launched an industry dependent upon unprecedented breadth and speed of feedback methods, all of which, unfortunately, produced conditions where accelerating communication methods could initially be misused as often or more often than they were adaptively used.

Walter Lippman's 1921 book, Public Opinion

Edward Bernays 1923 book, Crystallizing Public Opinion

Edward Bernays 1927/1928 book, Propaganda

(hat tip to Derryl Hermanutz)

Propaganda, of course, started with the first human tribal grouping.

Propaganda and "civilization" (organized mass society) go hand in glove, as Lippman pointed out. Recruitment to at least some like-minded narratives is necessary for organization.  Like anything, consensus is only as valuable as we make it.  Natural selection still proceeds, at cultural as well as individual levels.

Any useful tool can also be misused. Group recruitment becomes mal-adaptive the moment it is separated from full aggregate feedback, thorough discussion and Deliberative rather than rushed decision-making.

The history of biology, business & warfighting all prove this conclusion.

Biology involves constant selection among multi-factorial combinations.

Business involves rushed decisions based upon insufficient data, but neither too rushed nor too slow.  The survivable balance between immediate/local revenue & results (ILR) and delayed/distributed costs & consequences (DDC) produces the mythologized "Market Forces" - titrated as a dynamic ILR/DDC ratio.

Warfighting?  Another version of the same topic.

1) Group success "follows the quality [including tempo] of distributed decision-making." [Note: the USMC changes this link periodically. If broken, google "USMC Warfighting pdf"]

2) Groups "generate tempo by decentralizing decision-making."
    [Note: the USMC changes this link too. If broken, google "USMC Campaigning pdf"]

3) Groups decentralize decision-making by distributing resources well enough to allow distributed exploration of dynamic options.
(It's called liquidity or recombination. We teach one another, distribute resources where useful, & give time for study & practice  - all to generate more innovation.  Species innovate by exploring the unpredictable value generated by sexual recombination.  Cultures innovate by exploring options-recombination, which requires unrestricted liquidity, NOT hoarding of liquidity units.)

4) Groups continually re-prioritize decentralized decision patterns, by distributing feedback well enough and soon enough to continuously re-align all actions with net benefit.

Those 4 points, and you could argue the Theory of Evolution, are recognizably a re-statement of the US Declaration of Independence & the US Constitution.  Systems modeling.

This ain't rocket science. Ancestors of every surviving species figured this out operationally, over 1 million years ago. All homo sapiens should know this by 5th grade, not just members of sports, music, dance or drama teams.

So WHY is it that we repeatedly allow unworkably small cabals to try to rule increasingly larger and more complex populations via diverse versions of Central Planning? What's the difference between a Central Committee run by Royalty, Oligarchs, Fascists or Bolsheviks?   A dead end, by any other name, still stinks as badly.

If none of us are as smart as all of us, there's an obligatory corollary.

  All of us are never as ignorant as a tiny few of us.

No matter how impressive a new discovery or invention, it's importance pales in comparison to the task of INTEGRATING into 4.5 Billion years of highly conserved, evolutionary history.  No matter what ingredient you may consider adding to the bathwater ... don't get so distracted that you throw out the recombinant baby!

So.  What do we DO about seemingly rampant occurrence of Mass Delusions among electorates that seem to be increasingly easy to manipulate?

Same thing we've always done.
  Plan, Do, Study, Act (i.e., actively re-tune EVERYTHING, within tolerance limits)
   As originally formalized by Walter Shewhart.
   Or some renamed version of the same, e.g., OODA Loop.

Just keep in mind that the act of re-tuning requires an adequate Deliberative Process, one that can't be left to a few squeaky wheels.

We'll come through this, one way or another, and then inevitably reproduce Social Parasites on an even larger scale.  Parasites, whether other biological species or social variants, are the frictions that prompt further active re-tuning of evolving processes.

People will do anything in their power to avoid thinking, until absolutely necessary.  After all, it burns a LOT of calories to think.  Yet when absolutely necessary, we can do it easily enough, no matter how much we initially resent having to do so.  We're currently waiting for an adequate proportion of our own and other electorates to tire of panicking and start deliberating.

Good luck, and be patient, but not too patient.


Friday, September 16, 2022

‘Samarkand Spirit’ to be driven by ‘responsible powers’ Russia and China — Pepe Escobar

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.
"Dollar hegemony" under Bretton Woods, which is long in the tooth, is now a target, along with post-WWII US hegemony. What will emerge as a replacement is now being fashioned, and it looks like a system tethered to real resources is in the works.

See also

ECNS (Chinese official English news service)
China's trade with SCO members up 26 pct in Jan-Aug
Xinhua (Chinese state-sponsored media)

Using the Payments System to Enforce an Russian Oil Price Cap Likely to Cause Supply Shock — Yves Smith

$300 oil? What would that do to the global economy?

Naked Capitalism
Using the Payments System to Enforce an Russian Oil Price Cap Likely to Cause Supply Shock
Yves Smith

Also from Yves

US Is Becoming a ‘Developing Country’ on Global Rankings that Measure Democracy, Inequality

China is the world’s largest economy: Get over it — Dean Baker

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 Blog
China is the world’s largest economy: Get over it
Dean Baker | Co-director of the Center for Economic and Policy Research in Washington, D.C

Why Sergey Glazyev’s Memorial to the Legacy of Lyndon LaRouche Matters — Matthew Ehret

While 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 Insights
Why Sergey Glazyev’s Memorial to the Legacy of Lyndon LaRouche Matters
Matthew Ehret
Originally at Strategic Culture Foundation ((sanctioned by the US Treasury Department)

A transcript of the speech Glazyev gave commemorating LaRouche is appended to the post.

See also

While Sergey Glazyev is not "Putin's brain" anymore than Alexander Dugan, they both reflect important attitudes in Russia. Though neither has any official position of influence in the Russian government at this time, Glazyev is an insider whereas Dugin is decidedly an outsider. Both are worth knowing about to understand the present context, but Glazyev is a much more influential figure in Russia today than Dugin.

Caught Between Two Systems: The Race is on for a New Multipolar System
Matthew Ehret

Also

The Cradle April 14 2022
Pepe Escobar
(linked to previously at MNE at the time of publication)


Wednesday, September 14, 2022

The Rate Hikes Will Continue Until Morale Improves — Stephanie Kelton

Rent inflation, not wage increases. But the Fed only has a shotgun to use.

The Lens
The Rate Hikes Will Continue Until Morale Improves
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

U.S. CPI: Ouch — Brian Romanchuk

The 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
U.S. CPI: Ouch
Brian Romanchuk

Bill Mitchell – Inflation falling in the US and expectations are sharply in decline

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
Inflation falling in the US and expectations are sharply in decline
Bill Mitchl | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australiael

Tuesday, September 13, 2022

Western Sanctions Are Creating New, East-Tilting Russia — Wang Wen

Report not only on Russia  oping with sanctions by turning east but also the blistering growth of the Far East and the consequent shifting of wealth eastward.

Sputnik International (Russian state-sponsored media)
Western Sanctions Are Creating New, East-Tilting Russia
Wang Wen | professor and executive dean of Chongyang Institute for Financial Studies at Renmin University of China
Originally at Global Times (Chinese state-sponsored media)

Also at SI

Russian Aviation Industry Corrects Yeltsin Yaw–Boeing, Airbus Ditched — John Helmer

Import substitution.

This bears on world trade. The present geopolitical situation is affecting the international flow of goods, including materials, intermediate goods and finished goods.  The world economy is heavily influenced by the level and quality of international trade. Sanctions, of course, inhibit international trade and result in new supply chains and also import substitution. Both Russia and China have adopted policies of self-sufficiency. Being large-scale with plenty of knowledge, skill, experience, technology and industrial capability, this avenue is available to them.

Naked Capitalism
Russian Aviation Industry Corrects Yeltsin Yaw – Boeing, Airbus Ditched
John Helmer at Dancing with Bears

[UK] Treasury reasoning that is completely circular — Peter May

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
Treasury reasoning that is completely circular….
Peter May

Monday, September 12, 2022

Bill Mitchell — MMTed edX MOOC – Modern Monetary Theory: Economics for the 21st Century – starts September 14, 2022

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
MMTed edX MOOC – Modern Monetary Theory: Economics for the 21st Century – starts September 14, 2022
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Inflation Hurts Everyone, But So Does Unemployment — Stephanie Kelton

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.…
Phillips curve tradeoff that uses unemployment to target inflation.

The Lens
Inflation Hurts Everyone, But So Does Unemployment
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

Free online course — Modern Monetary Theory: Economics for the 21st Century

Enrolments now open for the MMTed edX MOOC

Modern Monetary Theory: Economics for the 21st Century.

The free, 4-week course starts on September 14, 2022. 

Videos, interviews with many MMT people, and more. 

Further Details:

Bill Mitchell — IMF reform proposals for the Eurozone are just weak band aids that cannot fix the dysfunctional mess

 The 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....
Bill Mitchell – billy blog
IMF reform proposals for the Eurozone are just weak band aids that cannot fix the dysfunctional mess
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Sunday, September 11, 2022

A short history of inflation in modern times — Ben Norton interviews Michael Hudson

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.
Video and transcript.

Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
A short history of inflation in modern times
Ben Norton interviews Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City, and Guest Professor at Peking University

Saturday, September 10, 2022

Ukraine partying

 

This is gotta be fake news.. these young people REALLY would rather be going to the Arctic and freezing their asses off….


😂😂😂😂😂


US household wealth fell by a record $6.1 trillion in Q2

 

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…





Thursday, September 8, 2022

Links — 8 Sep 2022

India Punchline
Timely assertion of India’s strategic autonomy
MK. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador.

The Vineyard of the Saker
Germany’s energy suicide: an autopsy
Pepe Escobar
Sputnik International (Russian state-sponsored media)
China Opens Record-Breaking Hypersonic Wind Tunnel Able to Reproduce Mach 33 Speeds

Andrew Batson's Blob
What will self-reliance mean for China?
Andrew Batson

CaitlinJohnstone.com
Our Entire Civilization Is Fake And Stupid
Caitlin Johnstone

Bill Mitchell — Deep adaptation, degrowth and MMT – Part 2

 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
Deep adaptation, degrowth and MMT – Part 2
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Wednesday, September 7, 2022

UK green lighting fracking

 

Euthanize all the Art Degree climate nutters and a lot of the current problems immediately go away….






TASS — Putin reveals why Russia’s future lies in the Far East and Arctic

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)
Putin reveals why Russia’s future lies in the Far East and Arctic

Also
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.
Hard ball.

Oilprice
Putin Threatens Complete Energy Cut Off To West If Price Caps Are Imposed
Charles Kennedy

Also

Sputnik International (Russian state-sponsored media)
Russia’s Eastern Economic Forum Focuses on Rise of Asia on Global Arena

Will Truss Rehabilitate Keynes — Anatole Kaletsky

Mentions MMT.

Project Syndicate (free registration may be required)
Will Truss Rehabilitate Keynes
Anatole Kaletsky | co-chairman and chief economist of Gavekal Dragonomics, an investment research and asset management group based in Hong Kong and Beijing, a well-known economic commentator, a member of the governing board of the Open Society,  chair of the Institute for New Economic Thinking from its foundation in 2010 until 2015, and presently a member of INET’s governing board.

India’s energy diplomacy blossoms, finally — MK. Bhadrakumar

 Oil.

India Punchline
India’s energy diplomacy blossoms, finally
MK. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador.

See also

TASS (Russian state media)
Russia ready to turn on Nord Stream 2 — Putin

UPDATE

Zero Hedge
India Dashes US "Hopes" On Oil Price Cap: "We Will Buy From Russia, We'll Buy From Wherever"
Kyle Anzalone & Connor Freeman via The Libertarian Institute

What is a paleo-left agenda? — Branko Milanovic

Might have been simpler just to say, "old left" But "Old Left" is already taken, as is "New Left." Branko Milanovic's conception of "paleo-left" is somewhat different from "Old Left," which focuses on economic issues than the "New Left," which focuses on social justice issues. If you are interested in the Left, the post is worth reading. In the US, the political meaning of "left" is Democratic Party and it's factions, liberal and progressive. Progressive is supposedly "far left," but in terms of world politics it is center-left, while liberal is center-right. There is no genuine left in the US on the political spectrum.  Even the actual socialists are mostly history in American politics, whereas there was an American socialist party at one time. Although it still exists, it hasn't run a presidential candidate since 1956.

Global Inequality
What is a paleo-left agenda?
Branko Milanovic | Visiting Presidential Professor at City University of New York Graduate Center and senior scholar at the Stone Center on Socio-economic Inequality, senior scholar at the Luxembourg Income Study (LIS), and formerly lead economist in the World Bank's research department and senior associate at Carnegie Endowment for International Peace

Tuesday, September 6, 2022

Bank Reserves Demystified — Brian Romanchuk

Bank 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
Bank Reserves Demystified
Brian Romanchuk

Monday, September 5, 2022

MAKING MONEY WORK FOR US: How MMT Can Save America — New Book by Randy Wray



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.
Wiley Links:
Polity Books Link:
Amazon:

Sam Levy — Modeling Monopoly Money in Minsky

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.

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....
Sam Levy — Medium
Modeling Monopoly Money in Minsky


Veteran Intelligence Professionals for Sanity — Ukraine Decision Time

September 5, 2022
MEMORANDUM FOR: The President
FROM: Veteran Intelligence Professionals for Sanity
SUBJECT: Ukraine Decision Time
REF: Nukes Cannot be Un-Invented, VIPS

Published at AntiWar

‘Fiscal responsibility’ or the economy for us? — Peter May

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…

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....
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.

If this is just a rumor and it doesn't pan out, it's curtains.

OPEC+ agrees on oil output cut — MK. Bhadrakumar

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 Punchline
OPEC+ agrees on oil output cut
MK. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador.

See also
The 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
Irina Slav

Russia To Help Iran In Developing Crucial Gas Reserves
Simon Watkins

also

TASS (Russian state media)
Russia able to adapt to EU oil embargo — Energy Minister

Russia finds way to avoid risk of insurance sanctions — Energy Minister

Russia to redirect energy resources to Middle East and Africa — Energy Minister

Russia to keep gas production volumes — Energy Minister

Gazprom discussing accelerated redirection of gas supplies eastward — Energy Minister

Russia to expand Kozmino oil port capacity by 7 mln tonnes — Energy Minister (Kozmino is in the Far East)

Russia to boost electricity export to China — Energy Minister

Sberbank sees growth of national currency payments between Russia and India — Deputy CEO

Sputnik International (Russian state-sponsored media)
Russia's Sberbank Plans to Open Office in India's Mumbai in 2023 - Deputy Head (Sberbank is state-owned.)

Russia, China, BRICS, World Economy — Tony Norfield

About the not-G7. Longish.
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....
Economics of Imperialism— A blog that analyses the imperialist world economy - how it works and what are its main features today

Sunday, September 4, 2022

The Man in the High Castle: Alternate Reality Lessons for Modern Warfighters — Tom Ordeman, Jr.

Yeah, I know. The Kagan Klan's Small Wars Journal. But occasionally they post a good read. This one is fun. Frank Herbert's Dune is featured.

Small Wars Journal
The Man in the High Castle: Alternate Reality Lessons for Modern Warfighters
Tom Ordeman, Jr.
https://smallwarsjournal.com/jrnl/art/atreides-harkonnen-literary-corollary-self-awareness-and-host-nation-perception-small-wars



Michael Roberts — Energy, cost of living and recession

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
Energy, cost of living and recession
Michael Roberts
https://thenextrecession.wordpress.com/2022/09/04/energy-cost-of-living-and-recession/

See also


Reminiscence of the Future
That's The Way You Do It(c).
Andrei Martyanov, former USSR naval officer and expert on Russian military and naval issues. Martyanov was born in Baku, USSR in 1963. He graduated from the Kirov Naval Red Banner Academy and served as an officer on the ships and staff position of Soviet Coast Guard through 1990. He took part in the events in the Caucasus which led to the collapse of the Soviet Union. In mid-1990s he moved to the United States where he currently works as Laboratory Director in a commercial aerospace group. He is a frequent blogger on the US Naval Institute Blog. He is author of Losing Military Supremacy, The (Real) Revolution in Military Affairs, and Disintegration: Indicators of the Coming American Collapse — Clarity Press
http://smoothiex12.blogspot.com/2022/09/thats-way-you-do-itc.html

also

Sputnik International (Russian state-sponsored media)
German Counterintelligence Expects Mass Protests Over Rising Costs of Living, Energy
https://sputniknews.com/20220904/german-counterintelligence-expects-mass-protests-over-rising-costs-of-living-energy-1100368798.html

also

Internationalist 360º
Mass Protests Taking Place Across Europe Against NATO Proxy War, Sanctions and the Economic Crisis (Lots of excerpts from Twitter)
https://libya360.wordpress.com/2022/09/04/mass-protests-taking-place-across-europe-against-nato-proxy-war-sanctions-and-the-economic-crisis/

US Dependence on Russian Uranium and Sanctions Policies
Vladimir Danilov
https://libya360.wordpress.com/2022/09/04/us-dependence-on-russian-uranium-and-sanctions-policies/

A Son of the New American Revolution
WHAT HAPPENS WHEN PLAN B IS JUST MORE OF PLAN A?
Larry C. Johnson | CEO and co-founder of BERG Associates, LLC, an international business-consulting firm with expertise combating terrorism and investigating money laundering, formerly Deputy Director in the U.S. State Department’s Office of Counter Terrorism (1989-1993, and CIA operations (1984-1989)
https://sonar21.com/what-happens-when-plan-b-is-just-more-of-plan-a/