Thursday, November 16, 2023

The Smith Family manga continues – Episode 5 is now available — Bill Mitchell

Episode 5 in our new weekly Manga series – The Smith Family and their Adventures with Money – is now available. Have a bit of fun with it and circulate it to those who you think will benefit …
William Mitchell — Modern Monetary Theory
The Smith Family manga continues – Episode 5 is now available
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia


Footsoldier said...

Hudson making a complete arse of it again. It's like Ernie and Bert from Seasame street.

Confusing private sector debt and public debt as always and blurring the distinction. His obsession with the balance of payments always gets him in a mess.

Footsoldier said...

His obsession with the balance of payments under a gold standard, fixed exchange rate world. Is akin to Ramanan's die in a ditch external sector psychosis.

Warren is Right all you need are 2 whistles. A whistle you blow Every time an economist overlays gold standard thinking over today's system. A whistle you blow Every time an economist overlays fixed exchange rate thinking over today's system.

Any presentation will sound like Monday night football.

Footsoldier said...

Do you not find it unbelievable how many times he has sat with Kelton, Wray and Mosler that he still does not get the national debt ?

Just listen to his opening salvo it is pushing the English language to its limits. Sometimes I wonder if he actually knows what he is talking about anymore. Got a touch of the Brandon's.

Konrad said...

I agree with Hudson’s explanation of the shift in the U.S. economy from an industrial model to a post-industrial model (i.e. to a financialized model).

However at 13:00 Hudson says, “The Korean War pushed the United States into chronic balance of payments deficit.”

Strange. Perhaps Hudson is getting his terms confused.

“Balance of payments deficit” is another term for trade deficit (not for budget deficit). The USA had a net trade surplus until late 1975. From that point on, the USA had an ever-growing trade deficit (balance of payments deficit). The USA now has the world’s biggest trade deficit by far. (By contrast, Russia and China have gigantic trade surpluses.)

The USA was able to get away with its trade deficit for as long as the world agreed to send goods to the USA in exchange for dollars. But now the world is increasingly de-dollarizing. The more the world de-dollarizes, the more the USA will be in crisis, since the USA is not self-sufficient. Most of the goods in your local Wal-Mart came from abroad. The less that foreigners accept US dollars in exchange for foreign goods, the more Wal Mart will become empty, and the more the USA will disintegrate. We see this as more and more U.S. cities become crime-ridden dystopias.

The U.S. congress cannot stop this. All the congress can do is throw more and more money at Israel to sustain the Gaza bombardment.

As foreigners are less and less desirous of dollars, the U.S. government tries to keep up by issuing more and more dollars. This contributes to inflation, and it also worsens the flow of dollars from the 99% to the 1% in the USA. (Most of the 99% are increasingly renters, not owners.)

I hypothesize that one of the reasons why the Fed is keeping interest rates so high is to keep U.S. Treasury yields high, so that Treasury securities remain attractive to foreigners, so that foreigners continue to want dollars. However this is failing to slow the global program of de-dollarization. Ten years ago foreigners held 43% of U.S. Treasury securities (which the corporate media outlets misleadingly call “U.S. government debt”). Today foreigners hold only 30%, and the percentage continues to fall. When it approaches 0%, and no foreigners want dollars, the USA will be finished, because it is not self-sufficient.

All this became inevitable when the U.S. economy shifted from an industrial model to a post-industrial model (i.e. to a financialized model). Many economists warned that this would happen, but they were drowned out by Wall Street greed.

With financialization, the name of the game is to enslave via debt, and to make money from money, not from producing and trading industrial goods. This game essentially functions like a Ponzi scheme. It can only continue for a while before it collapses.

Matt Franko said...

You’re sliding into a Roger’s/Sciff/Farber doomsday psychosis

Konrad said...

My tenets are logical and irrefutable. You are too feeble to refute a single one of them.

Therefore you sit picking your nose while you smugly accuse me of “doomsday psychosis.”


Matt Franko said...

“Out sourcing” was a US soft power initiative… it’s being reversed…

Will take 10 to 20 years…

Konrad said...

The impetus for outsourcing was not “soft power,” but the drive for increased profits through decreased labor costs.

Regarding outsourcing being "reversed," please provide some shred of proof.

Matt Franko said...,currently%20being%20built%20in%20Arizona

Matt Franko said...

Many others

Matt Franko said...

Largest industrial investment in world history….