Friday, March 1, 2024

Prince: How to flood Hamas tunnels

 

Prince is ripping off my stuff! … I was saying this a week after the attack duh…. sheesh no brainer..





Saturday, February 24, 2024

As US Modern Monetary Theory advocates make their case in Australia, Gareth Vaughan explains the world through their lens and how it might go down in New Zealand — Gareth Vaughan

 This article, which is favorable to MMT, contains a good explanation of what MMT is and isn't.

interest.co.nz
As US Modern Monetary Theory advocates make their case in Australia, Gareth Vaughan explains the world through their lens and how it might go down in New Zealand
Gareth Vaughan

Another side of the story.
[US] Conservatives, [El Salvador’s President Nayib Bukele] said, “always tell me that the problem is high taxes, but they are wrong.”

“The real problem is that you pay high taxes only to uphold the illusion that you are funding the government, which you are not,” he claimed, before describing how the government is financed by Treasury bonds, which are purchased by the Federal Reserve with printed money backed by the bonds themselves.

“The government is funded by money printing, paper backed by paper. A bubble that will inevitably burst,” he said, adding that “the situation is even worse than it seems, because if most Americans and the rest of the world were to become aware of this farce, confidence in your currency would be lost. The dollar will fall, and Western civilization with it.”
RT — Question More (Russian state-sponsored media)

Friday, February 23, 2024

Argentina Economy Shrank in December by Most Since Pandemic

 

“Oh sheeeeeeeeeeit!”….  😂😂😂





Monday, February 19, 2024

Japan sinks into recession – but there is more to the story than the mainstream narrative would care to admit — Bill Mitchell

Last week (February 15, 2024), the Japanese Cabinet Office released the latest national accounts estimates for the December-quarter 2023 – Quarterly Estimates of GDP for Oct.-Dec. 2023 (The First preliminary) – which showed that the economy had slipped into an official recession (two consecutive quarters of negative GDP growth) and in the process had moved from being the third largest economy in the world to become the fourth behind the US, China and Germany. According to the media release – 2023年10~12月期四半期別GDP速報 – the quarterly growth rate was -0.1 per cent (annual -0.4 per cent). Domestic demand was weak, contributing -0.3 per cent while net exports contributed +0.2 per cent. Part of the story is related to a ‘valuation drop’ because the yen has depreciated in recent months, undermining the value of exports and increasing the value of imports. But while there is some hysteria in the ‘markets’ and the mainstream economics commentary about the result, caution is required because the data will be revised (it was only preliminary) as more data comes in and it is highly possible for the negative to become a positive. But, I also take a different perspective on this from the dominant narrative in the media as you will see if you read on.

There is quite a deal of misunderstanding about the so-called ‘lost decade’ in Japan, following its dramatic real estate crash in the early 1990s.

The current narrative builds on those misunderstandings and constructs the GDP outcomes as if low growth is a problem.

If you look at the next graph you will start to get the point....
William Mitchell — Modern Monetary Theory
Japan sinks into recession – but there is more to the story than the mainstream narrative would care to admit
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Friday, February 16, 2024

The Smith Family manga–Episode 12– the Season 1 finale–is now available — Bill Mitchell

Episode 12 – the finale for Season 1 in our new Manga series – The Smith Family and their Adventures with Money – is now available. We will let everyone calm down from the excitement for a little while to give us time to write and draw Season 2, which will begin on May 24, 2024.

In the meantime, 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 – Episode 12 – the Season 1 finale – 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

Wednesday, February 14, 2024

Job Guarantee and Employer of Last Resort schemes: the political constraints on maintaining full employment — Nick Johnson

Kalecki

The Political Economy of Development
Job Guarantee and Employer of Last Resort schemes: the political constraints on maintaining full employment
Nick Johnson

US inflation rate is declining – no case for further rate rises — Bill Mitchell

 The US CPI data released yesterday showed that inflation continues to decline and the so-called ‘surprise’ that seems to have shocked the ‘markets’ are mostly down to the eccentric way the US Bureau of Labor Statistics calculates housing costs. The data provides no justification for further rate hikes in the US or anywhere else for that matter....
William Mitchell — Modern Monetary Theory
US inflation rate is declining – no case for further rate rises
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Sunday, February 11, 2024

Why economics is an impossible science — Lars P. Syll

 The title might better read, Why orthodox economics is an impossible science. While so-called orthodox economics fits this bill, it doesn't necessarily apply to so-called heterodox schools like MMT.

One of the characteristic criticisms of MMY economists by so-called orthodox economists (like Paul Krugman) is "Where's your model?" For neoclassical" economists, who assume formalization as a sine qua non of doing economics, required methodological assumptions include "equilibrium and maximization" as Krugman is fond of saying. 

The post linked to below objects that this not even possible given the attendant conditions, other than as a "toy model" serving as "a teaching tool." Such models cannot underlie a casual explanation of real change in the world of events that economists then assume themselves perfectly capable of not only explaining but also prescribing. Their results speak for themselves.

Instead, MMT adopts an historical and institutional approach which recognizes economics as a study of events from particular perspectives that are conditioned by both subjective and objective considerations instead of presuming that economics is based on invariant principles similar to the natural sciences.

Economics is unlike physics and chemistry as natural sciences but it partakes of the life sciences including their extensions as the social sciences. While these "science" qualify as "science" owing to their assumption of naturalism and use the scientific method, the application of method is determined by the type of subject matter. The life and social science differ from the natural sciences in approach in that they types of data they study and seek to explain are quite different from the phenomena studied by natural sciences. 

A good example of this is an unsourced quote widely attributed to Richard Feynman, "Imagine how much harder physics would be if electrons had feelings." However, the issue goes much deeper institutionally since economics and finance are joined at the hip, economic data being reported not only in real terms but also nominal with the nominal taking precedence since monetary value in exchange is the basis of reporting about economic data. As a result, conditions that affect this supervene in economics, as MMT economists recognize. These conditions are historical and institutional.

Lars P. Syll’s Blog
Why economics is an impossible science
Lars P. Syll | Professor, Malmo University

Saturday, February 10, 2024

Yi Gang on China's Digital Yuan — Zichen Wang

Former Central Bank governor lectures on the theories and practices of China's ambitious central bank digital currency.

China appears to be the most ambitious among major economies to develop its central bank digital currency - the digital yuan, and we have covered its development before.

On October 10, 2023, Yi Gang, China’s central bank governor between 2018 and 2023 gave a public lecture at Tsinghua University entitled 数字人民币的相关理论与实践 Theories and Practices Related to the Digital Yuan....

Almost everything you wanted to know about the digital yuan. 

Pekingnology
Yi Gang on China's Digital Yuan
Zichen Wang

Tuesday, February 6, 2024

What is Yi Gang trying to say in his 1st interview after retiring from PBoC? — Zichen Wang

Not about MMT but rather about "money."
Today, I am sharing a January 12, 2024 interview of Yi Gang, former Governor of the People’s Bank of China, by 金融时报 Jinrong Shibao (literally Financial Times), a newspaper by the central bank.

Yi obtained his Ph.D. in Economics from the University of Illinois Urbana–Champaign and became an Associate Professor with tenure at Indiana University–Purdue University Indianapolis, before going back to Peking University, his alma mater. He later joined the People’s Bank of China and rose through its ranks until heading it between 2018 and 2023.

Yi retired in July last year and his five-year tenure at the helm of China’s central bank is known for, according to Bloomberg, “a restrained policy approach focused on moderate stimulus and reducing financial risks in the economy.”
Pekingology
What is Yi Gang trying to say in his 1st interview after retiring from PBoC?
Zichen Wang

See also
In attrition war, on the economic front just like the Gaza and other fire fronts, the Axis of Resistance wins by maintaining its offensive capacities and operations for longer than the US and US-backed Israeli forces can defend. Like troops, tanks, and artillery pieces, the operational goal is to grind the enemy slowly but surely into retreat, then capitulation.

How to measure if this is happening now to the Israelis in the international money markets?

An international currency and bond trader answers by providing, first, a primer for each of the market indicators, and how to read them; and then a ready reckoner for the damage being done to Israel’s economic resources as those who operate in the money markets gauge their opportunity.

For making money, you see, the opportunity of capitalizing on Israel’s defeat may soon be more profitable than investing in its success. When the markets see this chance at profit-making, usually long before the politicians and their captive media acknowledge it, there is an inflection point in the flow of money. That does its damage, not by hitting the Israelis and Americans in their bunkers with bullets and bombs, but by moving the money the US-backed Israeli entity needs out of reach, and cutting them off, both the US and Israel, from market confidence that they can win their war, genocide or not.

The writer of this primer and money-market assessment has requested anonymity to protect against retaliation from the US, Israel or their allies.
Dances with Bears

Yves Smith comments on the above post here. She has some issues with it.

Saturday, February 3, 2024

Samuelson on the legacy we leave for grandchildren — Richard Murphy

Paul Samuelson, the author of what still might be the most-sold textbook of the post-war era had this to say on page 427 of his first edition, addressing a subject then very close to the thoughts of many of his readers:
Can it be truthfully said that “internal borrowing shifts the war burden to future generations while taxing places it on the present generation”? A thousand times no! The present generation must still give up resources to produce the munitions hurled at the enemy. In the future, some of our grandchildren will be giving up goods and services to other grandchildren. That is the nub of the matter. The only way in which we can impose a direct burden on the future nation as a whole is by incurring an external debt or by passing along less capital equipment to our posterity.
Funding the Future
Samuelson on the legacy we leave for grandchildren
Richard Murphy

Bear demoted

 

This guy has been really wrong in hindsight … those that took his advice paid a high opportunity cost…



Friday, February 2, 2024

The Smith Family manga continues–Episode 11 is now available — Bill Mitchell

Episode 11 in our new Manga series – The Smith Family and their Adventures with Money – is now available. We are approaching the climax for Season 1. The final episode in the series will be published on February 16, 2024.

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 11 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

Thursday, February 1, 2024

Moving to a sustainable system of food production within a degrowth paradigm — Bill Mitchell

As the title says, the post is about "moving to a sustainable system of food production within a degrowth paradigm." The basis of the discussion is whether this can take place within the context of "capitalism." 

Bill argues for the position that it cannot. I have set for reasons previously explaining my agreement with this view. A major reason can be summarized as "perverse incentives." Of course, it is more complicated than that but the rubric "perverse incentives" sums up Marx's notion of internal contradictions inherent in the capitalism system.

However, even granting a critique of capitalism, the fundamental question remains unanswered, namely, how does global production get from here to there. Without specifying a potentially fruitful route the project remains utopian. Bill proposes to undertake at this from the perspective of  André Gorz, a project on which he is now working.

William Mitchell — Modern Monetary Theory
Moving to a sustainable system of food production within a degrowth paradigm
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Will the Hegemon Ever Accept a New Westphalian World Order? Pepe Escobar

Pepe Escobar reviews Prof. Glenn Diesen's new book, The Ukraine War & The Eurasian World Order. 

Escobar recently reviewed Emmanuel Todd's La Défaite de L’Occident (“The Defeat of the West”).

The reviews are short and present views that suggest the world order is changing not only politically but also economically as a result of decolonization. 

This emerging trend portends to grow the pie for all albeit not without growing pains as the dominant parties attempt to maintain their hegemony.

Strategic Culture Foundation (sanctioned by the US Treasury Department)
Will the Hegemon Ever Accept a New Westphalian World Order?
Pepe Escobar

If this site is blocked for you, try Global South here and here.

Wednesday, January 31, 2024

China is ‘world’s sole manufacturing superpower’, with 35% of global output — Ben Norton

China’s state-led economic development model and robust industrial policy has transformed it into what an influential European think tank calls “the world’s sole manufacturing superpower”, making up 35% of global gross production – more than the 9 next largest manufacturers combined.…
China has overseen world-historic economic growth through a government-led development model, in which state-owned enterprises control the natural monopolies and “commanding heights” of the economy, state-owned banks give favorable loans to strategic industries, and the state’s robust industrial policy helps the country move up the value chain toward higher value-added forms of production.
Geopolitical Economy

See also

Chartbook
Adam Tooze

Tuesday, January 30, 2024

Wishful thinking

 

It’s wishful thinking to think it’s being driven by wishful thinking…



It’s being driven by a type of academic practice that doesn’t exist in the “hard sciences “…



Monday, January 29, 2024

Anything we can actually do, we can afford — Bill Mitchell

I often make the point in talks that the fictional world that mainstream economists promote leads to poor decisions in the real world by our policy makers. We saw that in the 1980s and 1990s with the large scale privatisations of public enterprises, touted as employment-enriching, productivity-boosting strategies to provide ‘more money for government to spend on welfare’. We now have enough data to know that in almost all the examples the promises have not been fulfilled and the outcomes worse than what would have been had the enterprises been maintained in the public sector and motivated to provide public service rather than private profit. The same mistake is being made with the response to the climate emergency. Economists and commentators are claiming we need to ‘repeat the privatisations’ to get enough investment cash to facilitate the necessary restructuring. They are wrong and if governments, operating on the assumption that they do not have ‘enough cash’, rely on private funding for climate initiatives then the outcome will be poor for societies.

I have been in London for the last several days and my conversations with people in politics and related have all suggested to me that there are very few people who are prepared to challenge the mainstream economic consensus….
William Mitchell — Modern Monetary Theory
Anything we can actually do, we can afford
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Friday, January 26, 2024

Pepe Escobar: Five Variables Defining Our Future

 Pepe Escobar relies heavily on Michael Hudson's economic analysis for his five "variables."

Sputnik International

Wednesday, January 24, 2024

This Is How Money Works (Video) — Dave Johnson

For the record. Warren Mosler.

Seeing the Forest
This Is How Money Works (Video)
Dave Johnson

Lower British fiscal deficit gives the central government no more or no less capacity to net spend to reduce unemployment — Bill Mitchell

Today, I reflect on the latest public finance data released by the British Office of National Statistics which shows the fiscal deficit is smaller than expected. Even progressive journalists have written this up as providing more scope for pre-election largesse to be provided. The fact that the fiscal balance is lower provides no more or no less scope for the government to net spend. The relevant questions that should be answered before such an assessment can be made are ignored by the journalists, including the fact that the unemployment rate is rising and the supply-driven inflation is falling fast.
William Mitchell — Modern Monetary Theory
Lower British fiscal deficit gives the central government no more or no less capacity to net spend to reduce unemployment
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Monday, January 22, 2024

Civil society is in jeopardy in the UK as funding cuts erode local government capacity — Bill Mitchell

I keep hearing from friends who live in Britain that I will be shocked when I get there on Thursday of this week after a nearly four year absence. One friend, who has just returned said that the deterioration in the public infrastructure is now fairly evident. Despite my absence, I have been keeping a regular eye on the data and so these anecdotal reports and reflections come as no surprise. It is obvious that the Tory government has sought a depoliticisation strategy by cutting local government spending capacity as a way of diverting blame for the consequences of their austerity push. The problem now is that after 13 or so years of Tory rule, the cuts are eating into the very essence of civil society in Britain. Like all these neoliberal motivated cuts, the cuts to council grants will prove to be myopic. The dystopia they are creating will come back to haunt the whole nation.
Something similar happened in the US since the 60s (Vietnam era). The deterioration in public infrastructure has continued. The problems have bipartisan recognition but they have not yet been dealt with effectively because of an erroneous notion of affordability. Ironically, funding existing and projected needs adequately would draw forth increased supply of resources, create new jobs, and stimulate demand without necessarily being inflationary.

MMT shows how financial affordability is never the problem for a monetary sovereign if real resources are available to address the issues. Of course, this is some competition in allocation of real resources to consider also.  The constraint is not the availability of funding but rather of inflation if demand outstrips the availability of resources to meet it.

Then it becomes a matter of setting priorities. This is a political matter involving many influences. A big reason that analysis of priorities differs among interest groups is incentives and in addition, different parties use different frameworks for framing the analysis.

William Mitchell — Modern Monetary Theory
Civil society is in jeopardy in the UK as funding cuts erode local government capacity
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Why The "Friedman Thermostat" Analogy Should Be Uncomfortable For The Mainstream — Brian Romanchuk

 More on "inflation" and the policy rate.

Bond Economics
Why The "Friedman Thermostat" Analogy Should Be Uncomfortable For The Mainstream
Brian Romanchuk

Russia And Iran Finalize 20-Year Deal That Will Change The Middle East Forever — Simon Watkins

  • Iran’s Supreme Leader Ayatollah Khamenei gave his official approval to a new 20-year comprehensive cooperation deal between the Islamic Republic of Iran and Russia.
  • The agreement will replace the 10-year-deal signed in March 2001 and has been expanded not only in duration but also in scope and scale.
  • The new deal includes far-going agreements on defense and energy.

Iran previously concluded extensive trade deals with China, as well as a "strategic partnership." Iran is also approved for membership in BRICS, SCO and BRI.

Oilprice.com
Russia And Iran Finalize 20-Year Deal That Will Change The Middle East Forever
Simon Watkins

Saturday, January 20, 2024

QT

 

We can’t forget this QT is still happening in the background too… in view of S&Ps recovering back to a old 2 year high this week…

Fed steadily keeps working this balance down and it at least takes some reserve asset pressure off “money center” banks that have ample/excess reserves… 

This “unprinting money!” is supposed to be bearish according to monetarists… yet equity index values are currently back to all time highs after a 2 year hiatus…

Concomitant the daily RRP sub-account is being reduced… daily RRP account balance is down to $600B having been $2.3T a year ago …. but still any non zero RRP balance means reserve assets are flowing towards banks that don’t have the regulatory capital to posses them and accordingly have to figure out how to divert them or otherwise apply reduced values to other assets they posses… but at least this daily RRP amount has been significantly reduced over the past year…

Fed has no stated plans to modify the current QT policy…




Friday, January 19, 2024

Waller Comments — Brian Romanchuk

More on "inflation."

Bond Economics
Waller Comments
Brian Romanchuk

Stephanie Kelton Thinks the Conventional Wisdom Is Changing — Jacobin's Lukas Scholle interviews Stephanie Kelton

Economist Stephanie Kelton has made a name for herself by insisting that deficits don’t matter. In an interview with Jacobin, she argues that we're seeing a paradigm shift away from free-market dogmas and austerity.
Jacobin
Stephanie Kelton Thinks the Conventional Wisdom Is Changing
Lukas Scholle interviews Stephanie Kelton, professor of public policy and economics at Stony Brook University,

Thursday, January 18, 2024

Michael Hudson on the state of the world

Danny Haiphong interviews Micheal Hudson. Video and transcript.

Michael Hudson — On Finance, Real Estate And The Powers Of Neoliberalism
Credit the Economic Planner
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

India and Global Left interviews Michael Hudson. Video and transcript.

India and Global Left
Perfecting Imperialism
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



The Smith Family manga continues—Episode 10 is now available — Bill Mitchell

Episode 10 in our new Manga series – The Smith Family and their Adventures with Money – is now available. We are approaching the climax for Season 1.

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 10 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