Monday, July 31, 2023

Explaining China’s & India’s Reported Differences Over Expanding BRICS — Andrew Korybko

 Follow on to Korybko's previous article about BRICS+ and alternative currency/payments system. Again, cutting through the hype of both an impasse owing to Chinese and Indian opposition and also the over-optimism of the cheerleaders for an alternative currency. Korybko argues that the countries involved are proceeding carefully in finding common ground in spite of competing national interests — that is, acting maturely.

Naked Capitalism
Explaining China’s & India’s Reported Differences Over Expanding BRICS
Andrew Korybko

See also

Backgrounder.

Bill Totten's Weblog
The West never bothered to understand China …

Sunday, July 30, 2023

William Mitchell — Central bankers deliberately trying to increase poverty is not a sound policy framework

What we will discuss today is that central bankers are effectively intent on increasing poverty in their societies. And, whichever way one looks at it, relying on such a pernicious policy tool – one that deliberately seeks to increase poverty – is not a sound basis for achieving social stability. And, and as inflation has been falling anyway, despite the hikes, the negative distributional impacts should militate against using such a nasty and inefficient instrument....
William Mitchell — Modern Monetary Theory
Central bankers deliberately trying to increase poverty is not a sound policy framework
Bill Mitchell |rofessor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia P

First We Go for Moscow, Then We Take Beijing — Pepe Escobar

This is a follow-up piece that includes Africa. It also has more on BRICS+ as well as ongoing work on developing an alternative payments system. The title is misleading in that it is representative of the actual subject of the post. The US and West don't figure in much in what he has to say other than being oppositional to these projects.

Strategic Culture Foundation (sanctioned by the US Treasury Department)

GDPNow

 

Initial number for US 3Q +3.5% not too shabby…





Saturday, July 29, 2023

Pepe Escobar — Geopolitical Chessboard Shifts Against US Empire

This is a longish and fairly detailed summary of recent developments in the geopolitical and geoeconomic spheres and their self-augmenting interaction and integration on the way to actualizing the vision of multipolarity based on international law rather than a US-led (imposed) "rules-based-order), that is to say, unipolarity.

This is also a more balanced account than some of Pepe Escobar's posts that suffer from confirmation bias. This is more critical than "creative," that is, hyped. It doesn't mention anything new that has yet to appear in the alternative news on social media, but it brings it all together into a coherent picture of the present state of affairs in the global dynamic.

This view is based on a particular viewpoint that favors multpolarism and decolonization, which have been to the forefront in recent developments. The Russian leadership is now talking about this specifically as the defining moment in the historical dialectic pitting the Global North against the Global South in the West's effort to maintain and extend the Western hegemony that has dominated global history over the past several hundred years. While this post remains one-sided, it is a good summary of this perspective.

Often the US, UD, Europe, and West in general are depicted as declining. There are reasons that favor this view, but it can also be argued that it is not so much a matter of the Global North declining as it is the Global South and East rising owing to the proliferation of knowledge and technology. While involves a clash among competing interests between the blocs, neither the Global North/West nor the Global South/East are homogenous in this regard. Nor are their components of equal power. 

The defining factor, however, is that the US is no longer the sole superpower. Russia has regained that distinction and China has arguably arrived at it. The US as leader of the West is trying to contain them and if possible colonize them, or at least vassalize them. They are determined to resist this. The Great Game continues to unfold. Pepe Escobar's posts are useful in getting a handle on this.

Sputnik International (Russian state-sponsored media)
Pepe Escobar: Geopolitical Chessboard Shifts Against US Empire

See also

Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
NATO Moves to Bait China
Michael Hudson, Radhika Desai, and Pepe Escobar

Related

Gilbert Doctorow — International relations, Russian affairs
Gilbert Doctorow


The coming European recession may be worse than 2008 — Philip Pilkington


Bank lending data paints a grim picture for the Eurozone economy
Unherd
The coming European recession may be worse than 2008
Philip Pilkington

More Art degree hijinks

 

Here from some sad eternally ineffectual UK MMT people with the “musical chairs!” and “takes chairs away!” figurative language:



And here from some monetarist people with their figurative language “taking away the punch bowl!” (What is it with these Art degree people’s continuous use of party activities in figurative form?馃)




Both unqualified sorry to say… neither ever getting anywhere… 







Thursday, July 27, 2023

Alt-Media Is in Shock After the BRICS Bank Confirmed That It Complies with Western Sanctions — Andrew Korybko

More on alternative payments system and BRICs currency.

Naked Capitalism
Alt-Media Is in Shock After the BRICS Bank Confirmed That It Complies with Western Sanctions
Andrew Korybko, American geopolitical analyst and independent journalist based in Moscow, and member of the expert council for the Institute of Strategic Studies and Predictions at the People’s Friendship University of RussiaKo

William Mitchell — The Bank of England ‘losses’ are meaningless and should never be used to justify fiscal austerity

We really get to see how absurd humanity can be when put in a neoliberal ideological straitjacket when we see serious discussion by serious and educated people about the government paying itself back for losses it makes by loaning itself currency that it issues as a monopolist. They conduct these conversations through the lens of complicated accounting structures that try to obscure what is actually going on and then invite political commentary from others that have no real idea of what is going on yet feel empowered or arrogant enough to offer all sorts of catastrophic scenarios about the consequences of what is essentially nothing at all. Once one sees through the nonsense it becomes clear that these ruses are just smokescreens for conservatives trying to cut fiscal spending and damage the prospects for those most in need of government support....
William Mitchell — Modern Monetary Theory
The Bank of England ‘losses’ are meaningless and should never be used to justify fiscal austerity
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Global Economic History in 2.5 Hours — Michael Hudson

Video and transcript.

Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
Global Economic History in 2.5 Hours
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

Funny How The UFO Narrative Coincides With The Race To Weaponize Space — Caitlin Johnstone

Connecting dots?

CaitlinJohnstone.com.au
Funny How The UFO Narrative Coincides With The Race To Weaponize Space
Caitlin Johnstone

Tuesday, July 25, 2023

MMT Verify: How We Can Staff the NHS Without Tax Rises — NeilW

Even though we have had a book called The Deficit Myth for years, the myth persists.
New Wayland
MMT Verify: How We Can Staff the NHS Without Tax Rises
NeilW

Russian Central Bank Governor Elvira Nabiullina and Head of “BRICS Bank” Throw Cold Water on BRICS Currency Project Yves Smith

Another example of hype versus reality.  An alternative payments system based on an alternative currency is just "an aspiration" at this point. The devil, as usual with anything complicated, is in the details. In addition, it won't be a simple matter to get agreement among all the parties. 

This doesn't mean it will not happen eventually, only that it won't happen in the time frame many are representing and hoping. 

For now, bilateral trade in the currency of the counterparties is the viable alternative along with ad hoc workarounds.

Naked Capitalism
Russian Central Bank Governor Elvira Nabiullina and Head of “BRICS Bank” Throw Cold Water on BRICS Currency Project
Yves Smith

Random PPI Observations — Brian Romanchuk

PPI too volatile to be a useful indicator of inflation or predictor of CPI.

Bond Economics
Random PPI Observations
Brian Romanchuk

Monday, July 24, 2023

In Defense of Low Interest Rates — James K. Galbraith

In recalling John Maynard Keynes’s revolutionary theory of interest, reviewing the doctrines Keynes sought to overthrow, and analyzing the structural transformations of the US economy, James K. Galbraith maintains there is no alternative to a policy of low interest rates. However, such a policy cannot be effective, he argues, without a radical restructuring of the US economy as a whole.

Policy note. 

Levy Institute of Bard College
In Defense of Low Interest Rates
James K. Galbraith | Lloyd M. Bentsen Jr. Chair in Government/Business Relations and Professor of Government at the Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin  

BRICS problems, BRI solutions — Pepe Escobar

While the five original BRICS states have their geopolitical differences, they are finding enormous common ground on the geoeconomic front as trade volumes surge and trade routes multiply.
Warming up but not yet ready for prime time. Progress is being made but much of the hype is premature. No new currency will be announced at the upcoming meeting, although it is being discussed. The issue now is an alternative payments system for settling trade among the BRICS nations.

The Cradle
BRICS problems, BRI solutions
Pepe Escobar

It's the economy - July Politburo meeting readout — Zichen Wang

Edited by Zichen Wang and now hosted at the Center for China and Globalization (CCG), a leading non-government thinktank in Beijing that takes no position on issues raised in the newsletter. Check out The East is Read by CCG as well.

Longish and fairly detailed.

Pekingnology
It's the economy - July Politburo meeting readout — Full translation, context, and notes
Zichen Wang

Also by Zichen Wang
Kishore Mahbubani's speech on The Asian 21st Century at CCG

See also

Zero Hedge
China's Politburo Aims To Stabilize Property Market By Intensifying "Counter-Cyclical Adjustments"
Tyler Durden

Also

East Asia Forum
China is invaluable to global value chains
Ligang Song, Professor of Economics in Arndt-Corden Department of Economics at the Crawford School of Public Policy, The Australian National University, and Yixiao Zhou, Associate Professor of Economics at the Arndt-Corden Department of Economics, Crawford School of Public Policy, The Australian National University.





Sunday, July 23, 2023

Pepe Escobar — US Empire of Debt Headed for Collapse

Prof. Michael Hudson’s new book, The Collapse of Antiquity: Greece and Rome as Civilization’s Oligarchic Turning Point” is a seminal event in this Year of Living Dangerously when, to paraphrase Gramsci, the old geopolitical and geoeconomic order is dying and the new one is being born at breakneck speed.
Book review.

Sputnik International (Russian state-sponsored media)
Pepe Escobar: US Empire of Debt Headed for Collapse

See also
The gains for the BRICS will likely be substantial
Going where the growth is. It's about profit rate.

Asia Times
Why capitalism is leaving the US, in search of profit
Richard D. Wolff, Professor of Economics Emeritus at UMass Amherst and a visiting Professor in the Graduate Program in International Affairs of the New School University in New York. Richard Wolff is also a co-founder and active contributor of his non-profit: Democracy at Work

Also

"So says the NYT."

Bracing Views (July 15, 20233)
Higher Military Spending Will Save Democracy
W. J. Astore, Lieutenant Colonel (USAF ret.), taught at the Air Force Academy, the Naval Postgraduate School, and currently at the Pennsylvania College of Technology

Saturday, July 22, 2023

My eBooks are free this weekend Jason Smith

Jason Smith is a physicist whose hobby is economics.

Information Equilibrium
My eBooks are free this weekend
Jason Smith

The Looming War Against China — Michael Hudson

The world is dividing into two blocs: a post-industrial US/NATO vs the Global Majority
President Biden has said that this war will be global in scope and will take many decades as it expands to ultimately isolate and break up China....

Economist Jeffrey Sachs has also been warning of this impending war, cold or hot, for some time. 

See also Thucydides Trap

Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
The Looming War Against China
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

See also

Download a free (open access) copy of The Asian Century in pdf or epub format at Spinger.

interest payments on the Federal debt are now higher than the annual defense spending

 

Monetarists freaking out….  F’em….  馃槀馃槀馃槀馃槀





Friday, July 21, 2023

It Turns Out That No One Wants to Tell the Truth About Government 'Debt' — Stephanie Kelton

 Useful summary of the MMT position on government finance and accounting — with copious links.

The Lens
It Turns Out That No One Wants to Tell the Truth About Government 'Debt'
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

Advantages To Procedural Changes In Bond Market? — Brian Romanchuk

From my recent Torrens Zoom call, I ran into questions about procedures in the government bond markets. The main question was whether I saw potential changes to the markets to improve things. The second was more of a concern about the complexity and opacity of the bond market.
Bond Economics
Advantages To Procedural Changes In Bond Market?
Brian Romanchuk

Going Against The Grain, Separating The Wheat From The Chaff – This Is How The New Black Sea Campaign Will Go—John Helmer

Intersection of geopolitics and geoeconomics concerning world trade, grain, and fertilizer.

Dances with Bears
Going Against The Grain, Separating The Wheat From The Chaff – This Is How The New Black Sea Campaign Will Go
John Helmer

See also

Sputnik International (Russian state-sponsored media)
Pepe Escobar: Neocons Want War With China

Also

If Martin Armstrong is correct, more intersection of geopolitics and geoeconomics concerning world trade, grain, and fertilizer.

Armstrong Economics
Martin Armstrong

Wednesday, July 19, 2023

Can the US Re-Industrialize? — Michael Hudson

Video and transcript.

Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
Can the US Re-Industrialize?
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

William Mitchell — RBA interest rate rises are inflationary and neoliberal privatisations have reinforced that

While the details of the post are specific to Australia, the MMT point is general, namely, that raising the price of "money" by increasing the interest rate adds an increased inflationary bias to already increasing inflation as the price increase of "money" is passed on to goods and services owing to increased costs and also monopoly power.

The thinking behind this is apparently that increasing the price of "money" makes not only goods and services more costly but also the cost of borrowing across the board, thereby reducing investment, which is the driver of growth in the conventional theory. So the idea apparently is that the antidote is inflation expectations is increasing prices to the point at which demand is reduced, forcing layoffs. The thinking here is that in the chief driver of inflation is labor power as full employment is approached. So the remedy is to reduce consumption and investment-based demand to lower demand for workers by inducing economic constriction through increased prices based on interest rate-based cost increase across the board.

So it may not be a lack of awareness that the increase in interest rate is a price increase that adds to inflationary pressure. It may be part of the plan. Lacking a theory of inflation, as Janet Yellin admitted, it is difficult to tell what the central bank's thinking is in detail other than generalities.

William Mitchell — Modern Monetary Theory
RBA interest rate rises are inflationary and neoliberal privatisations have reinforced that
Bill Mitchell |rofessor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Covert Geopolitics — Russia Confirms BRICS Will Create A Gold-Backed Currency

In a recent meeting in Cape Town, South Africa, the foreign ministers of the BRICS countries, along with representatives from more than twelve nations, emphasized their intention to establish an international trading currency.
Sounds more like an international payments system rather than a currency for public use. Some details are given but so far it is nebulous other than the joint commitment to do it.

Covert Geopolitics
Russia Confirms BRICS Will Create A Gold-Backed Currency


Tuesday, July 18, 2023

China plans new policies to spur consumption — China Daily

China is traditionally "a nation of savers." This tradition needs to be reversed to achieve a "dual-circulation" economy, that is, a balance between domestic consumption and exports more in line with developed economies. Until now, China's growth has been export-driven. This makes China dependent on external markets; hence, liable to sanctions and protectionism. It also sets China up for being caught in the middle-income trap. The Chinese leadership is aware of both challenges and the dual-circulation policy was developed to counter this.

China's GDP grew 5.5% year on year in the first half of 2023.

ECNS (Chinese official English news service)
China plans new policies to spur consumption
China Daily (Chinese state-sponsored media)

See also

India Punchline
M. K. Bhadrakumar | retired diplomat with the Indian Foreign Service and former ambassador

Also

Asia Times
China will focus on supply-side tech policy at Politbureau meeting
David P. Goldman

Alex Douglas On Arches And Money — Brian Romanchuk

Alex Douglas just published a post on arches and money which I quite liked. It is an easy read, and I will just offer my spin on one of his points. It also leaks into a discussion of engineering, which I will digress into at the end of this post.
Bond Economics
Alex Douglas On Arches And Money
Brian Romanchuk

Sophistry or Shibboleth? - "Capital Flight" — NeilW

Framing tricks and controlling the narrative are the base tools of neoliberal economics. One character that pops up regularly is the Fickle, Flighty Foreigner. Worthy of a Shakespearean tragedy, they will brutally condemn any country that deviates from the divine path.

Let’s explain the narrative trick and how to counter it.
New Wayland
Sophistry or Shibboleth? - "Capital Flight"
NeilW

Monday, July 17, 2023

Monetary Policy for Dummies? — John Smithin

Contrary to what we were taught in the graduate schools of half-a-century ago (the heyday of monetarism), monetary policy now typically means setting or influencing the interest rate that commercial banks pay on loans of central bank base money in the overnight market — the policy rate. What I mean by the ‘real’ policy rate is the nominal policy rate (the actual percentage rate quoted) less the currently observed rate of inflation. Such a zero real policy rate (ZRPR) will achieve as close an approximation as possible to a fair distribution of income, in a particular sense. It also promotes inflation stability, financial stability, higher growth, full employment, and higher real wages. It is a ‘good thing’ from many points of view. The sense in which a ZPRP is ‘fair’ is that rentiers (whose income arises solely from interest payments on existing wealth) do not share in the income generated by current productive activity. Nonetheless, the real value of existing financial capital is preserved. Such a policy also has the virtues of transparency and simplicity.

A ZRPR is different thing than the zero-interest rate policy (ZIRP) favoured by advocates of ‘modern money theory’ (MMT), which is that the nominal policy rate should be zero — or what Rochon and Setterfield called the Kansas City rule. Both are examples of a ‘parking it’ approach to interest rates, but there are two main reasons for preferring a ZRPR to ZIRP....
Sort of interesting.

Monetary Policy Institute Blog
Monetary Policy for Dummies?
John Smithin, Executive Co-Director, Secretary and Treasurer, Aurora Philosophy Institute and Emeritus Professor of Economics in the Department of Economics and the Schulich School of Business, York University, Toronto, Canada

Sunday, July 16, 2023

Truflation

 

Another figure of speech just what we needed…. anyway the change in this US price index just hit a new 52 week low…

BOE is 7 points below this increase in the UK… the Fed would have to be at  -5% …

S&P would probably be somewhere over 10,000 ….

Instead Brandon has his Fed 3 points above and the psychos are threatening EVEN MORE … 馃




MMT Verify: Will Investors Shun Government Debt? — NeilW

In response to a report by the UK Office of Budget Responsibility1 UK Journalist Robert Peston tweeted the following opinion:
So the obsession of Hunt and Sunak with defeating inflation is understandable - because in the absence of any significant fall in inflation, there is a risk that investors will shun UK government debt and interest rates for the government and for all of us would then rise to crippling levels. This parlous debt backdrop explains why the Bank of England and the Treasury are prepared to risk recession to bring down inflation.
Let’s look into this claim using the MMT lens.
New Wayland
MMT Verify: Will Investors Shun Government Debt?
NeilW

Trump addresses young voters concerns about home ownership

 

If Trump is able to get back in the first thing he’s going to do is tell his Tsy/Fed to reduce interest rates substantially… just like Brandon told his Tsy/Fed to rapidly increase rates in unprecedented fashion…

"In the Biden economy, one third of Gen Z and millennials have no savings accounts and no savings whatsoever," Trump said during the Turning Point USA Action Conference in West Palm Beach, Florida. "They have nothing. Homeownership has been pushed out of reach for millions with the rate of 30-year mortgages up 177%."

It’s all political… it’s a waste of time to try to analyze Monetarism’s errors or whether or not price increases were “transitory”or blah blah blah…  these politicians are just going to do what they think is most politically advantageous to them… 

Trump will eventually add a specific interest rate reduction policy to his platform but at a later date closer to the election when he thinks it will be too late for Brandon to get in front of him on it..

Till then he and GOP will keep pounding Brandon on the Art degree figure of speech “inflation!” comparing current prices on items to those seen when Brandon took over in 2021… of which many are substantially higher… they will just talk about the prices that are remaining higher and say that is the figure of speech “inflation!”…

We’ll see how it goes…






Friday, July 14, 2023

A Tale of Two Cities — Alastair Crooke

The economics of neoliberalism and financialization versus the economics of Putin and XI. Who wins?

Alastair Crooke likely benefits here since he is not a trained economist.

Strategic Culture Foundation (sanctioned by the US Treasury Department)
A Tale of Two Cities
Alastair Crooke | founder and director of the Conflicts Forum, and former British diplomat and senior figure in British intelligence and in European Union diplomacy

Thursday, July 13, 2023

William Mitchell — US inflation rate down to 3 per cent and falling fast – it was transitory, folks

Yesterday’s US inflation data from the Bureau of Labor Statistics (July 12, 2023) – Consumer Price Index Summary – June 2023 – shows a further significant drop in the inflation rate as some of the key supply-side drivers continue to abate. The annual inflation rate is now back to 3 per cent and dropping fast. The risk now is that the conduct of the Federal Reserve will drive the US into a deflationary period with rising unemployment. Given that inflation peaked in the third-quarter 2022, that wages growth has been relatively subdued, and inflationary expectations’ survey evidence suggests no-one really thinks the inflation was going to endure, means that the US Federal Reserve’s logic is deeply flawed and not fit for purpose. They have been chasing an obsession that exists in a parallel universe to the real world. The risk is that they will continue to chase that obsession and use the fact that unemployment has still not risen much to claim there has to be higher unemployment. However, hopefully, the 3 per cent inflation rate result yesterday will cut-off any wild claims that they have to get the inflation down more quickly or risk a wages or expectations explosion. All cant of course.
Unfortunately, it is difficult to establish causality when many causal factors are potentially involved and there are also different kinds of inflation, e.g., cost-push and demand-pull. So, the Phillips curve-NAIRU farce of central banks using assumptions of conventional economics continues and the Fed will take credit.

William Mitchell — Modern Monetary Theory
US inflation rate down to 3 per cent and falling fast – it was transitory, folks
Bill Mitchell, Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Related

On the Economy — FRBSL
A Hard or Soft Landing? The Answer May Lie in the Beveridge Curve
Serdar Birinci , Tr岷 Kh谩nh Ng芒n

See also

David Colander quote.

Lars P. Syll’s Blog
The systemic failures of economic methodologists
Lars P. Syll | Professor, Malmo University

Also

A system produces the result of its design. Under "capitalism" economic systems are designed for "growth" through capital accumulation. Such systems assume, for example, that "labor" is a market and "land" (natural resources) are unlimited and that "the solution to pollution is dilution." In the extreme, the assumption is that "there is no such thing as society" (Margaret Thatcher).

Bidenomics


Now that CPI/PPI are collapsing YoY the GOP is just going to pound Brandon on the Art degree moron figure of speech "inflation!"  based on price comparisons from when he took over in Jan 2021....   easy peasy…

We now have to watch how the Biden people respond to this political attack...  from a Biden people perspective they may still think they have a figure of speech “inflation!” problem… tell their Fed people  to keep increasing the risk free rate to fight their figure of speech  “inflation!”…




Wednesday, July 12, 2023

Digital yuan ushers in new payment method with rollout of SIM card integration — Global Times

Trial stage involving "super SIM cards."

ECNS (Chinese official English news service)
Digital yuan ushers in new payment method with rollout of SIM card integration
Global Times

Russia becomes No.1 export destination for Chinese-made automobiles — Global Times

 Not only is import substitution happening but also substitution of exporters of "unfriendly" countries with exporters of "friendly" countries.

ECNS (Chinese official English news service
Russia becomes No.1 export destination for Chinese-made automobiles
Global Times (Chinese state-sponsored media)

William Mitchell — US spending data not demonstrating effectiveness of monetary policy

I have been looking for signs that the concerted efforts by most central banks (bar the eminently more sensible Bank of Japan) to kill growth and force unemployment up have actually been effective. My prior, of course, is that the interest rates will not significantly reduce growth in the short run, but may if they go high enough start to impact on spending patterns of low income households. The next data that will help us associate the interest rate effects on spending by income quintile in the US comes out in September 2023, so I will watch out for that. The most recent national accounts data from the US, however, does not support the mainstream belief that monetary policy is the most effective tool for suppressing expenditure. Far from it.
William Mitchell — Modern Monetary Theory
US spending data not demonstrating effectiveness of monetary policy
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Tuesday, July 11, 2023

China in “deflation!”

 

Some China price indexes MoM and YoY negative…





They keep cutting their rates…





“Carbon credits”

 

Why don’t these same unqualified Art degree climate nutter morons think we can run out of their “carbon credits!” like they all think we can run out of their “money!”?…. Make a decision already you hypocrite dumb-f#cks…. 馃





Monday, July 10, 2023

Time to address the root cause of weak demand — China Daily

It should be seen that the root cause of the current weak domestic demand lies in the low spending power of families caused by the high unemployment rate and high housing prices. Although China has arguably the largest middle-income group in the world, most of its wealth exists in the form of the real estate bubble that may burst under the pressure it is under.

Under the current policy of "dual circulation," domestic demand must increase in order to reduce dependence on exports to avoid the middle-income trap. But the Chinese are savers historically. Reversing that trend is likely going to involve a gradual process.

ECNS (Chinese official English news service)

How do banks actually create money? We explain — The Economist (video 1 minute)



One minute. They get it right. Banks create new "money" simply by entries in accounts. No details of the process now, but at least they have the key point correct.

Friday, July 7, 2023

Finance, power, integration: The SCO welcomes a new 'Global Globe' — Pepe Escobar

Discussions at the recent SCO Summit in New Delhi now point to the inevitable: The merging of new multipolar organizations and their collective reorganization of global finance.
The Cradle
Finance, power, integration: The SCO welcomes a new 'Global Globe'
Pepe Escobar

See also
 
"For making the new currency as good as gold, a truly sound currency, it must be convertible into gold on demand. I am not sure whether this is what Brazil, Russia, India, China and South Africa have in mind," he said. "Using gold as money, the unit of account would be a true game changer, no doubt about it. It could lead to a sharp devaluation of many fiat currencies vis-脿-vis the yellow metal (including the BRICS fiat currencies), and it could catapult up goods prices in terms of fiat currencies. It could be a shock to the global fiat money system. I am not sure that this is what the BRICS wish to achieve."
 The aim seeds to be to create a stable dollar alternative for trade settlement and one that is independent of control.

Gold and silver have been the dominant means of international settlement historically before the recent use of floating-rate currencies post-1971 when the US unilaterally ended dollar convertibility at a fixed rate. 

But that option comes with costs, too. At present the pros and cons of different solutions are being weighed and discussed.

Thursday, July 6, 2023

'TRUTH, TRUST AND HOPE" Targeting Disinformation Part Three: ChatGPT Is Not Reliable — Thornton Parker

...That answer showed Chat understands the basics of MMT. I asked why it didn’t mention MMT until I did, and was it promoting artificial ignorance.

The answer came back: “I apologize if it seemed that I was promoting artificial ignorance or neglecting the mention of modern monetary theory. As an AI language model, my purpose is to provide information and answer questions to the best of my abilities based on the knowledge I have been trained on. However, due to the limitations of text-based communication, I might not always cover every specific topic or perspective unless prompted.”

Note its point about “knowledge I have been trained on.” My impression is that Chat was trained on conventional economic theory and more on the criticisms of MMT than on MMT itself.

It may have been trained not to volunteer anything about MMT. It keeps saying that it does not have ideas of its own or biases. But it seems to have been fed with predominantly conservative, libertarian views that oppose government actions and interventions into the economy.….
You probably knew this already from criticism of ChatGPT about other subjects.

Daily New Record [Harrisonburg, VA]
'TRUTH, TRUST AND HOPE" Targeting Disinformation Part Three: ChatGPT Is Not Reliable
Thornton Parker

China unveils first open-source desktop operating system — China Daily

China rolled out its first open-source desktop operating system, called openKylin 1.0, on Wednesday, a key move that indicates the country has the ability to build its own self-developed operating system and fill the gaps in this field.

The openKylin 1.0 was developed by a group of Chinese companies led by China Electronics Corp, the country's largest State-owned comprehensive electronic information enterprise group. Other participants include the China Industrial Control Systems Cyber Emergency Response Team, Kylinsec Technology and more than 10 other software companies.

The launch of openKylin 1.0 will help bolster the iteration and upgrade of the domestic operating system; guarantee the security in key fields such as government affairs, finance, communications, energy and transportation; and provide reliable basic software services for the country's IT industrial chain.

Currently, China's software operating system industry is dominated by foreign labels, such as Microsoft Windows, Google Android and Apple Mac OS. The openKylin system can be applied in some hardware devices, including computers and mobile phones. Last year, CEC unveiled China's first desktop operating system developers' platform openKylin.
ECNS (Chinese official English news service)
China unveils first open-source desktop operating system
China Daily

The capitalists are circling over Ukraine — Thomas Fazi

Two weeks ago, thousands of representatives from businesses and governments from across the world gathered in London to “support Ukraine’s recovery”. But was the gathering of all those Western corporate elites at the Ukraine Recovery Conference entirely altruistic? There are, after all, massive profit opportunities being created by the war.
As Michael Hudson foresaw coming.

Unherd
The capitalists are circling over Ukraine
Thomas Fazi (co-author with Bill Mitchell of Reclaiming the State)

William Mitchell — UN Report on employment guarantees misses the essential points about buffer stock mechanisms

In 1978, during my postgraduate studies at the University of Melbourne I came up with the idea of a Job Guarantee – although I didn’t call it that then. I have written about it extensively since then and you can see some of the non-academic work published in this blog under the category – Job Guarantee. Among the many blog posts is this one – Some historical thinking about the Job Guarantee (February 25, 2021) – where I discuss some of the provenance of the idea. It is hard to get people interested in this idea because they dismiss it as just another public sector job creation scheme and then make all sorts of claims about inefficiency, ‘make work’ and all the rest of the ruses that are used to divert attention from the substance of an idea or proposal. In fact, the way I conceived the Job Guarantee and the way it has subsequently become a central part of the body of knowledge now known as Modern Monetary Theory (MMT) is not as a job creation program, but, rather, as a comprehensive price stability framework exploiting the dynamics of buffer stock mechanisms. Anyway, it seems that the UN might be interested in the idea of guarantee employment now after the special Rapporteur on extreme poverty and human rights published – The employment guarantee as a tool in the fight against poverty – in April 2023. The question is whether this is a job creation program or closer to the concept of a Job Guarantee.
A major problem is that in a capitalist world, governments are not supposed to influence markets using buffer stocks. That is evidence of a managed economy (read "socialist") rather than a "free-market" economy (read "capitalist"). So naturally the powers that be don't want to talk about it.

William Mitchell — Modern Monetary Theory
UN Report on employment guarantees misses the essential points about buffer stock mechanisms
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Wednesday, July 5, 2023

William Mitchell — Monetary policy in the hands of the central banker sociopaths is advancing the class interests of the elites

Recently, I wrote about the conditions that dictate what impacts interest rate changes will have on aggregate spending and demand-driven inflation in direction, magnitude and temporality – see RBA governor’s ‘Qu’ils mangent de la brioche’ moments of disdain (June 8, 2023). It is highly likely in many cases, the decisions by central banks to increase interest rates, ostensibly to ‘fight inflation’ actually make inflation worse. More people are starting to understand that point even though central bankers appear to be still talking big about further interest rate rises. But the evidence is mounting against their position and ultimately that evidence is exposing the deep flaws in mainstream macroeconomics. I argue today that the problem is not only that the interest rate hikes can be inflationary but they are also facilitating a major reinforcement of the class divisions in our societies whereby the low income cohorts are transferring massive income benefits to the higher deciles. I also discuss cricket which recently has provided a demonstration of how the class divisions work. Then some music, given it is a Wednesday.
Macroeconomics meets reality. Conventional economics is approached as a theoretical science rather than a practical one. Heterodox economics, beginning with Marx, takes a practical approach that seeks to align economics with real-world opportunities and challenges rather than account for price changes and their expected consequences in terms of "the natural forces" of the market. Heterodox economics does this by extending the purview of economics beyond so-called natural market forces. These conditions include social and political factors and institutional arrangements that affect economic behavior. This is where significant factors like class enter the equation whereas they are excluded by the methodological assumptions of the conventional approach.

William Mitchell — Modern Monetary Theory
Monetary policy in the hands of the central banker sociopaths is advancing the class interests of the elites
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

See also at Yahoo News

Scotonomics

Tuesday, July 4, 2023

New Economic Perspectives blog has been restored


Podcasts have not yet been restored.
 

Debtors of the world, unite! — Liam Kennedy interviews Jayati Ghosh

Jayati Ghosh speaks about the growing debt crisis in the global south, the IMF’s never-ending affinity for austerity and the need to confront the power of financial capital.
Jayati Ghosh has already teamed up with Michael Hudson on this. Financial capitalism interfaces with neoliberalism, neo-imperialism, and neocolonialism by gaining control using investment and debt, enforced by the "rules-based order" to the advantage of financial capital, which the Global North/West uses to dominate the Global South/East. The Global South/East is waking up to this. Decolonization is in the air. Russia and China have teamed up to provide the power needed for resistance. The battle for control is on as the West, dominant for 500 years, faces a challenge to its continued dominance.

MR Online
Debtors of the world, unite!
Liam Kennedy interviews Jayati Ghosh, Professor of Economics at the Centre for Economic Studies and Planning, School of Social Sciences, at the Jawaharlal Nehru University, in New Delhi
Originally published: Red Pepper on June 25, 2023 by Liam Kennedy

See also at MR Online

Europe is waking up to the fact that it is not a partner of the "Anglo-Saxons" but a vassal. The British fancy themselves as partners but that is wishful thinking owing to the "special relationship." But the UK has been vassalized too after losing the empire to the US post-WWII.


See also 

Interesting not so much for Ukraine as for the requirements for a cashless society. Ukraine is nowhere near meeting them. In contrast, Sweden is mostly a cashless society de facto, but not de jure.

The concept of "cashless" is also interesting in that many if not most people think of "money" as the money-thing, or token, which is cash (bills and coin) in their thinking. For example, Article 1, section 8 of the US Constitution gives the federal government the power to "coin money."

Naked Capitalism
Will War-Torn, Power-Starved Ukraine Be World’s First Cashless Economy? (Serious Question)
Nick Corbishley

Monday, July 3, 2023

William Mitchell — A large government presence required for energy transition does not mean massive deficits are required

There appears to be confusion among those interested in Modern Monetary Theory (MMT) as to what the implications for a green transition that will fasttrack the transition to renewable energy will require by way of government. I regularly see statements that government deficits will have to be ‘massive’ for extended periods because the private (for profit) market entities will not move fast enough to deal with the climate emergency in any effective way. The confusion inherent in these claims is that they fail to separate the ‘size’ of government from any particular ‘net spending’ (deficit) recorded by government. The two outcomes are quite separable and have to be if government action is to achieve sustainable outcomes, not only in terms of environmental goals but also price stability goals. So let’s work all that out. Failing to do so, leads MMT activists to make claims that open them up to criticism from those who understand the point I am making but have different ideological agendas. So they make erroneous claims such that ‘MMT just advocates big deficits’, or that ‘MMT thinks that deficits do not matter’. But they have been lured into that position, in part, by the social media behaviour of some MMT activists.

This is now going on at scale as capital resists the changes needed to address emergent challenges in a timely way. This is being worked out that the level of the world system in terms of the Global South/East confronting the five-hundred-year dominance of the Global North, which manifests historically at present as neoliberalism, and its attendant neo-imperialism and neocolonialism. The basis is economic (control of resources), political (control of territory), and social (confrontation of cultures and ideologies). There is no "solution" to this. The solution — the replacement of this moment of history with the next moment — is being worked out on the battlefield of history in the same way that such issues always have been and competing worldviews and interests collide.

William Mitchell — Modern Monetary Theory
A large government presence required for energy transition does not mean massive deficits are required
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Saturday, July 1, 2023

China’s demographic doomsayers cite the wrong data — David P. Goldman

Education plus technology = increased productivity.

Goldman shows how Krugman was wrong about the future of the Asian Tiger in the 90s. 

Those who lived through the similar rise of Japan post-WWII are struck by the similarities now with China. 

But China is a whole lot bigger and more consequential than Japan or the Asian Tigers. It is also bigger and more consequential than Germany, whose rise post-WWII was facilitated by the Allies to oppose the USSR. Now Germany is not only a vassal of the US, it is also in the process of canceling itself as an industrial powerhouse. Not so China, which is picking up those Russian resources and replacing the European countries in Russia's markets.

Asia Times
China’s demographic doomsayers cite the wrong data
David P. Goldman

See also

A Son of the New American Revolution
Guestpost by Observer

Also 

The song that is sweeping Russia.

Reminiscence of the Future
It Is Friday... [when Andrei posts some music]
Andrei Martyanov, former USSR naval officer and expert on Russian military and naval issues, and author of Losing Military Supremacy, The (Real) Revolution in Military Affairs, and Disintegration: Indicators of the Coming American Collapse (Clarity Press)


You Tube


See also

RT — Question More (Russian state-sponsored media)