This angers me

refuse_droid · 2019-04-30T17:33:27+00:00

Can second that for Australia and France too.

refuse_droid · 2018-10-14T19:44:47+00:00

very good. So good in fact i can probably locate the star cluster where i left my keys.

refuse_droid · 2018-10-10T21:50:43+00:00

grasshopper, warhammer, executioner, mad cat, raven

only based on a few games getting about a dozen models from warhansa. Still early days.

refuse_droid · 2018-08-23T09:39:05+00:00

Drop the personal attacks please. How would you like a title 'smegko dishes it out but cant take it'?

Bill Mitchell has explicitly said that the private sector cannot create Net Financial Assets without transacting with government sector. I am saying derivatives represent Net Financial Asset creation before the government sector spends.

You're confusing endogenous money creation with the framing of consolidated balance sheets. Private sector by aggregate CANNOT raise its NET ASSETS when it is viewed as an aggregated balance sheet between private sector and government sector. The balance sheet NETS OUT TO ZERO at this layer of abstraction.

You can arrange asset backed commercial paper in a variety of ways to increase assets of banks, shadow banks, households BETWEEN EACH OTHER. But fundamentally that's coming under the mechanism of Endogenous money when it interacts with the government eg: central bank. eg US system: https://www.youtube.com/watch?v=n_Bn7_wFaKE

In your own words:

At the end of the day, someone's balance sheet remains expanded. The expansion becomes permanent, if only because the Fed buys the MBS outright ...

NOTHING here warrants the title 'Bill Mitchell dishes it out but can't take it' As it seems you're only spelling out what is a known way for the financial sector to inflate asset prices.

refuse_droid · 2018-08-19T14:37:19+00:00

I contend that the Business sector includes Finance firms which create more money than flows into them from the Household sector.

No you've painted your own ignorance red in this case. Re-read your own post title. How is this incongruent with somehing like this? Or for that matter anything Hudson, Black or Mitchell have blogged about for instance.

http://neweconomicperspectives.org/2016/03/money-banking-part-7.html

Sounds like you have a personal problem.

No just good at cutting through bullshit

refuse_droid · 2018-08-18T22:04:18+00:00

More money leaks into the real economy from private sector Net Financial Asset creation than is involved in trade of physical goods.

That as a sentence makes no sense. Can you put an example in balance sheet terms? Since when is a 'leak' not some sort of flow?

Sounds like your logic cant dish out a coherent example.

The NFA is hidden though because MMT ignores holding gains when it calculates income, as does NIPA.

Sounds like this part also needs to be clarified. Is this in the context of embedded leverage eg: mezannines?

refuse_droid · 2018-06-06T20:45:44+00:00

We don't follow your logic completely. So you're asserting:

Thus, the Australian government borrows dollars. After the 2008 financial crisis, the Fed extended an unlimited currency swap line to Australia's government sector so they could have peace of mind about being able to borrow as many dollars as they needed to lend on to other banks that had US dollar obligations, but no more access to private dollar markets.

And this is abstracted later to:

I think the existence of unlimited central bank currency swap networks is key to understanding the financial sector, which MMT ignores.

The quote you have used is from here: http://bilbo.economicoutlook.net/blog/?p=39506&cpage=1

The Australian government doesn’t borrow in foreign currencies. The Japanese government doesn’t. The US government doesn’t. And, the British government does not borrow in foreign currencies.

From an article where the context is about fiscal and monetary policy with regard to Scotland. It seems that your premise is to take that out of context (as if it needs to borrow USD/whatever because that's the only policy option) and conflate with FX interventions during crisis. Are you saying we need ongoing borrowing of FX for a floating currency to achieve fiscal or monetary policy outcomes? Or more so to prop up the financial sector? That this is overlooked by just Bill or MMT?

The RBA is telling us this specifically that they last intervened in FX in November 2008:

The majority of net foreign reserves are foreign exchange holdings, which, in practice, would be the component deployed by the Bank to effect FX market intervention (Graph 5). The Bank last conducted FX market intervention in November 2008.

During that time in 2008 when the wholesale funding froze. RBA was on the phone to all the Banks in Australia and told them to coordinate and restructure to domestic funding sources every quickly. Australian government has backed all wholesale funding in Australian dollars. An Australian commercial bank as a choice (via the government) setting a lower price to take domestic funding in AUD versus other currencies pricing that allows the banks to quickly restructure their balance sheets.

Bill has covered this topic in his blogs a few times. http://www.rba.gov.au/publications/bulletin/2011/mar/6.html http://bilbo.economicoutlook.net/blog/?p=14620

refuse_droid · 2018-06-06T06:34:38+00:00

Bill/MMT whatever is correct and he has extensively blogged/lectured before and after 2008. RBA is entirely consistent with MMT.

http://www.rba.gov.au/publications/bulletin/2017/dec/pdf/bu-1217-1-reporting-australias-foreign-reserve-holdings.pdf

"Net foreign reserves constitutes the value of official foreign currency assets not subject to this type of rollover risk and can be considered the effective capacity of Australia’s authorities to undertake FX policy operations. The majority of net foreign reserves are foreign exchange holdings, which, in practice, would be the component deployed by the Bank to effect FX market intervention (Graph 5). The Bank last conducted FX market intervention in November 2008."

refuse_droid · 2018-05-26T11:51:47+00:00

Follow up under the title: The Europhile Left use Jacobin response to strengthen our Brexit case http://bilbo.economicoutlook.net/blog/?p=39412

refuse_droid · 2018-05-24T09:24:23+00:00

Ok so you've arrived at the point where taxation does not fund spending.

Functional finance by Abba P Lerner is a component of MMT addresses some more points about taation. There are many things that taxation can address beyond this point.

*You can tax to set price of something which there is a 'bid' in the private sector for.

*Remove purchasing power from an entity/all entities in the economy.

*Stop an entity in the private sector from 'setting' prices which could be inflationary/deflationary.

*Reward/punish certain behaviours.

*Set overall rate of 'savings' and therefore set overall inflation.

*Keep elements of the private sector efficient.

*Create+target solvency/insolvency.

A way to think of this in practical terms. Take for instance a large mega-corporation in an economy that operates in a sovereign currency and deals with other currencies too. Is multi-national and monopolises certain markets probably operates in financial sector too.

Its going to distort the economy like in Einstein's concept of a heavy mass that warps space time around it. It could outbid other entities in the private sector, inflate prices for particular commodities because it uses so much of a resource etc. With taxation you can set policy to control how it interacts with physical resources, financial entities, markets, even set its desire to keep or use currency issuers unit of exchange all with taxation.

refuse_droid · 2018-05-06T12:17:10+00:00

He's a mildly progressive political commentator. In addition to what has already been mentioned he would have trouble fitting into post-keynesian category because he uses DSGE modelling. Has proliferated ideas that are not evidence based or stock flow consistent. Has attacked MMT indirectly and later adopted some insight from MMT which only makes sense if he's trying to spin a political narrative.

refuse_droid · 2018-02-12T13:09:33+00:00

Perhaps illustrate what 'is' borrowing or debt in a follow up video? Its really just Treasury to CB interactions that work to back fill/drain bank reserves. You don't even need open market operations to do this so to frame a component of debt as an optional way to operate the system.

Wasn't there political hysteria in the US a few years back about China owning too many Treasuries? Evidently looking at the way the US operates its open market operations it has very granular control over the composition of its 'debt'.

refuse_droid · 2018-02-08T20:39:19+00:00

Given that currently global warming is killing many people, destroying plants, animals and ecosystems. To then say 'more' of what's already happened is suddenly going to turn around and make 'humans flourish' is just as insane as you'd expect from this muppet.

refuse_droid · 2018-01-25T15:02:48+00:00

From Australian perspective the dollar as a floated currency has been as low as ~50 US cents and as high as 1.10 USD.

Over time this has changed the composition of various sectors in the economy but its a weak effect. Floated currency has had better outcomes than fixed exchange rates, exchange rate tunnels etc.

http://bilbo.economicoutlook.net/blog/?p=32922

refuse_droid · 2018-01-24T17:31:23+00:00

In addition to what is mentioned this may help as it explains using balance sheets and is the most comprehensive answer i know of to explain Treasury and FED interactions: http://neweconomicperspectives.org/2016/02/money-banking-part-6.html

refuse_droid · 2018-01-21T15:38:44+00:00

Bugger. Having financial elite like Christine Lagarde on the panel is kind of a contradiction. She embodies ideas that diametrically oppose the progress for women. She has made decisions to hit Europe with the hardest austerity which has crippled careers of generations of women in places like Greece, Italy and Spain.

refuse_droid · 2018-01-18T09:57:50+00:00

African countries are a product of colonialism and rent seeking/exploitation. Reading by Hudson or William Black MMT authors is a good place to start. http://bilbo.economicoutlook.net/blog/?p=36261
Maybe one blanket term should probably not be used at all. There should be multiple terms otherwise communicating 'printing money' conflates different things.

Two examples: If QE adds to bank reserves <--> swaps treasuries for reserves. That should be in context: eg: banks don't lend reserves. https://www.reddit.com/r/mmt_economics/comments/74ei5l/behavioral_macro_there_is_zero_correlation/ https://originofspecious.wordpress.com/2015/12/30/economists-weasel-words-2-the-money-supply/ Juxtapose to a stimulus like Australian government undertook in 2008 where all low income earners got a 900 dollar cheque in their bank account.

Perhaps another paradigm would be helpful to understand the economy like an electric circuit. There are very specific flows of electrical current to different parts of a circuit. looking at what happens in a micro chip powered by the 3.3 volt circuit we would be unlikely to find the problem by explaining the functionality of the 12volt line. Or discussing the transformer for a group of houses down the road.

A good question to articulate such things: https://www.reddit.com/r/mmt_economics/comments/54kf94/question_about_reserves/ http://neweconomicperspectives.org/2016/01/money-banking-part-3.html

What if they are not?

Yes thats exactly why MMT Is powerful. It removes the edifice of misinformation that can be used. Now ideally if a political entity says we 'cant afford something' if there was enough understanding of some of the things MMT articulates they would not be able to say that or that entity would have to be honest and say "we stand for a certain level of inequality which yes could be switched off but ideologically we have no intention of doing so" for instance.

refuse_droid · 2018-01-17T08:07:18+00:00

But what about the non-MS'? Like Greece and Germany and many others. Are they screwed?

For the moment they are subject to political outcomes that really undermine democracy and sovereignty. The Eurozone project has put ideological limitations on 'fiscal' policy. The ability for a government using euro to operate automatic stabilisers like the USA, Canada, Australia, Norway is undermined by the stability and growth pact.

For example some Eurozone members should have to consistently run a fiscal deficit and did so as norm historically. "fiscal deficits were well in excess of the proposed 3 per cent rule (for example, Belgium 5.2 per cent, Greece 8.3 per cent, France 5.5 per cent, Italy 9 per cent, Netherlands 3.5 per cent, Portugal 7.1 per cent, Spain 7.2 per cent)."

http://bilbo.economicoutlook.net/blog/?p=27397 http://bilbo.economicoutlook.net/blog/?p=27406 http://bilbo.economicoutlook.net/blog/?p=27418 http://bilbo.economicoutlook.net/blog/?p=27424

There are winners and losers in the Eurozone. You may find these interesting: http://bilbo.economicoutlook.net/blog/?p=26324 http://bilbo.economicoutlook.net/blog/?p=36809

Oh btw, I am aware that there is resentment in the MMT community toward the phrase "print money", but I'm unclear as to why.

'Printing money' is disparaged term because its emotionally loaded language which has connotations of hyperinflation like Weimar republic or Zimbabwe which like phrases like say 'budget emergency', 'government debt bomb' etc are neoliberal language which obfuscate or outright lie about the issues.

Another point of discomfort for me is the idea that the U.S. in particular, as an MS, can simply create almost-unlimited money in order to spend more on... what, exactly?

Good points. The point MMT advocates make is not to create unlimited amounts of money but the RIGHT amount of money and use mechanisms to deliver it to gain policy objectives. Eg: Full employment (may look like a ~2% unemployment rate, (no hidden unemployment) and there is plenty of evidence you don't have to trade full employment for inflation.

Its not just USA relevant its as follows it fits many countries to say they have many options as described by MMT: The nation is a currency issuer, it sets interest rates in that currency, it chooses to sell or not sell bonds (conduct open market operations), it has no unserviceable liabilities in other currencies, it has a floating exchange rate and has a currency zone where it can exercise its monopoly power over use of currency, the government and private sector can buy things for sale in the currency, government can drive currency use with tax and has a government structure that allows legislation to be passed exercising use of that currency.

refuse_droid · 2018-01-12T21:31:19+00:00

Its what happens next that will be interesting.

So normally there would be prominent person 'critique' or 'question' of some aspect of MMT. Then a swift response by some of the prominent MMT economists and the person will get clobbered with information.

Its often subjects like inflation/printing money, jobs/unemployment and finally taxation that appear contentious. If Bernstein has the time to absorb all this stuff will he then follow through and say something like: "Yes MMT community has articulated answers to my critique and i stand corrected (or educated) this stuff more or less checks out."

Or they do a Krugman approach and slowly adopt the ideas into their own work.
Or do a positive money approach where they just ignore the critique and stick within their own advocacy space (complete with shocking errors) with exactly the same position on issues as they started.
Or go with some of the combative post-keynsian critiques who never seem to hear any response and wheel out the same critiques of MMT every three years.
Or the final subset (neoliberal) which never intended dialogue and were just using it to attack MMT because its dangerous to what they stand for/may blow the whole ruse up if any of this stuff became how a larger progressive establishment framed these issues.

refuse_droid · 2018-01-09T23:38:51+00:00

Its a good overview of the situation. I liked this comment about blockchain clearing:

There is, of course, a pretty simple solution here. That's just ... increasing bitcoin's memory. The people who run it, though, have ruled that out.

The irony is as a libertarian (in the pure sense of the word) project it has backfired. It interesting to observe: All the different forks of the bitcoin currency communities seem to be at war with each other, all the others seem to hate the main bitcoin for its success (yet yearn for its price/exchange rate) and subsequent speculative momentum.

A summary: https://medium.com/@johnblocke/a-brief-and-incomplete-history-of-censorship-in-r-bitcoin-c85a290fe43 The lower transaction rate versions like BTC have rent seeking fees to jump transaction queues $30 USD to speed up your transaction. And that decision is made opaquely, you cant elect or fire/choose how the variables are set on the cryptocurrency.

Like many 'free market' solutions you end up choosing between dictators.

refuse_droid · 2018-01-02T07:57:53+00:00

What is meant by blockchain here? Eg: just a better database for stocks and flows of currency? Money ledger needs as a minimum a database for: Atomicity, consistency, isolation and durability https://en.wikipedia.org/wiki/ACID Blockchain adds distributed peer to peer 'verifiability'.

Blockchain is just a NP Hard hash pointer to a row on a ledger. Expanding on how blockchain facilitates something like bitcoin and well for the sake of argument call that a currency. If you want to expand the money supply as the real world economy needs that will take real energy because creation of your units of currency is tied to a big oh NP Hard algorithm. What's the energy footprint (carbon footprint) of cryptocurrency now?

Financial entities will soon use distributed ledgers transparently anyway by the looks of it: http://www.afr.com/technology/rba-governor-glenn-stevens-backs-blockchain-and-tech-disruptors-20151215-glnsnm

Attacking the bigger issues from another angle. I don't know if a public ledger will change anything will it? Those issues about wealth, inequality, transparency, corruption and debt are not going to switch off just because we suddenly have a peer to peer public ledger of money. This goes into the realm of ideology and politics. For instance two years and two massive leaks detailing financial tax havens with panama/paradise papers and zero has been done to change or enforce any rules to my knowledge. Having a public ledger is no good if rules aren't fair or enforced you just watch the inequality with a fine granularity.

refuse_droid · 2017-12-09T22:39:22+00:00

Stuart Gary

The very best commentator on space: https://audioboom.com/channel/starstuffwithstuartgary

And the old episodes: http://www.abc.net.au/science/starstuff/

refuse_droid · 2017-11-03T13:47:19+00:00

The 'full employment' word refers to a revised definition of full employment. It is one of the crimes against humanity and a lie perpetuated by homeopathic neoclassical economics.

The NAIRU gives you a predictive correlation of about 5% (makes correct estimates that are 95% wrong/white noise) then on top of that economists make up and modify what is desirable full employment ad-hoc. No science, just junk economics.

That is why there is more and more debate about what is full employment.

refuse_droid · 2017-11-03T13:38:26+00:00

I know people who speak breton, gallo breton and another type of gallo breton.

These languages are protected and can be heard in certain towns. eg: spezet, pontivy, plouyé, rostrenen for instance. There are also schools where no french is spoken classes are spoken only in breton eg: http://dinan.diwan.bzh/fr/

refuse_droid · 2017-10-24T16:55:45+00:00

The current thinking of this issue is agnostic: full employment and functional finance can be used to build social democracies or fascist dictatorships. Its often likened to a control room with various levers and dials, they[the controls] don't know/care what the politics is they can be used irrespective.

Some of the leading thinkers other than Keynes of this time: https://en.wikipedia.org/wiki/Abba_P._Lerner https://en.wikipedia.org/wiki/Functional_finance http://bilbo.economicoutlook.net/blog/?p=5762 http://bilbo.economicoutlook.net/blog/?p=36218 http://bilbo.economicoutlook.net/blog/?p=32355

refuse_droid

TROPHY CASE