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Old 10th October 2019, 02:41 PM   #121
theprestige
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Originally Posted by !Kaggen View Post
"And, again, should there be a default event, the investor will still get full value for his investment as the entire euro value of the defaulted securities can be used at any time for the payment of Greek taxes. So while this discussion concerns the case of default, the removal of the risk of loss means there will always be demand for them at near risk free market interest rates...
I know it's far too late for me to get into this, but.

Am I the only one who has concerns about this promise of risk-free investment?
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Old 11th October 2019, 01:21 AM   #122
psionl0
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Originally Posted by Tippit View Post
The forum sort of looks like a ghost town, so maybe that's one reason.
You're not helping by limiting yourself to annual visits to this forum.

Originally Posted by Tippit View Post
I hope the censorship hasn't gotten worse.
It's about the same. Calling me an idiot won't get any complaints from me but you never know when a Tippit hater is going to report a post or yours - or a mod acts without a complaint.

Originally Posted by Tippit View Post
Anyway, does anyone have any thoughts about this? Is it an idea whose time has come, or just a final repudiation of any constraints on unchecked government power forever?
You have posted too much text to expect an intelligent response. It's almost as bad as posting links to a series of hour long YouTubes.

A nutshell summary is what is needed. To me it goes like this:
SMT: Government expenditure needs to be financed by a combination of taxation, government borrowings and printing money.
MMT: Government spending increases base money, government taxation decreases base money, government borrowing has a neutral* effect on base money.

It's a little like saying that (A + B) + C is different to A + (B + C)

* I know that foreign owned banks and governments print foreign money to buy bonds and that privately owned banks complicate everything.
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Old 17th October 2019, 07:38 PM   #123
Tippit
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Originally Posted by psionl0 View Post
You're not helping by limiting yourself to annual visits to this forum.
It's not that I dislike the forum, I just sort of ran out of things to say, and I don't think I've convinced a single person of any of my points of view.

Quote:

You have posted too much text to expect an intelligent response. It's almost as bad as posting links to a series of hour long YouTubes.

A nutshell summary is what is needed. To me it goes like this:
SMT: Government expenditure needs to be financed by a combination of taxation, government borrowings and printing money.
MMT: Government spending increases base money, government taxation decreases base money, government borrowing has a neutral* effect on base money.

It's a little like saying that (A + B) + C is different to A + (B + C)

* I know that foreign owned banks and governments print foreign money to buy bonds and that privately owned banks complicate everything.
I don't think the associative property applies to SMT and MMT, as there are some (at least superficial) differences for sure. In particular are the "constraints" that apply to SMT as referenced in the macromania blogpost, the debt ceiling, no direct financing by the Fed, and no monetary power by the Treasury. I suppose the debt ceiling is a joke, as after a certain amount of drama it always gets revised upward. The no direct financing by the Fed doesn't matter too much, as they finance primary dealers who finance the Treasury. The no monetary power by the Treasury is no big constraint either, as it only means that Treasury has to either tax or borrow first before it spends. Clearly the Fed is an ally here and provides plenty of fiat money (indirectly) for it to borrow.

One of the biggest issues I have with the system, is that I view the creation of money as just another tax. This really should be obvious to everyone now with the advent of MMT (hi Francesca!). Given this and given the so-called "independence" of the Federal Reserve, we essentially have a quasi-private institution which wields the power to tax in an arbitrary and practically unlimited fashion for private benefit (such as extending fiat money credit to private borrowers around the globe with little-to-no oversight). This is the epitome of corruption, and I think I will be vindicated for recognizing this, perhaps in the next century or beyond.

I have mixed feelings about MMT because it would in one fell swoop abolish the independent monetary power of the Fed and restore it to the Treasury (to whom this unconstitutional power "rightfully" belongs), but at the same time it also appears to remove all of the perhaps superficial constraints that SMT has imposed on government spending, which is worrisome to say the least. I suspect given the growth of government spending, debt, and the monetary aggregates, it probably doesn't matter a whole lot anyway. But at least with MMT the private money spigot for elites would be shut off, with the exception of their ability to perhaps control the Treasury. It's for this reason that if I had to make a prediction, I predict that the elites will not allow MMT to come to fruition, or they will have absolute control of the Treasury before then.

One last note, if you read the macromania blog post, you will notice them discussing whether or not money is destroyed "in vacui" under the current SMT, as it would be under the proposed MMT. In other words, they're claiming that the Treasury has been destroying money via tax collection all along, a subject that has been touched upon previously in a few threads on this forum. The Treasury General Account apparently resides at the New York branch of the Federal Reserve, but the balance does not count towards the monetary aggregates. I would counter by saying that since the Treasury is spending base money into the economy in perpetuity, the net result is mostly a wash. What do you think?
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Last edited by Tippit; 17th October 2019 at 07:43 PM.
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Old 18th October 2019, 04:17 AM   #124
Sceptic-PK
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Originally Posted by Tippit View Post
...we essentially have a quasi-private institution which wields the power to tax in an arbitrary and practically unlimited fashion for private benefit (such as extending fiat money credit to private borrowers around the globe with little-to-no oversight).

... abolish the independent monetary power of the Fed and restore it to the Treasury (to whom this unconstitutional power "rightfully" belongs)
Over the journey I've asked you several times to distinguish between the US' (relatively unique) central banking structure vs dozens of other countries' wholly-government central banks. The latter are essentially the Treasury authority to which you refer but you've never acknowledged this in any of your long posts criticising central banking.

If the Fed was reduced to just another independent (government) statutory authority like the central banks in most other countries, do you think your criticisms would really disappear? Genuine question.
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