Can We Keep A Few S&P Points For Posterity?
When will the Fed rescue equities? Does the vaunted "Fed put" still exist? If so, where's the strike? Is it February 2020 levels? Must we lose all of our pandemic wealth gains? Can't we keep just a few index points -- you know, for posterity?
What if the strike is even lower? Have we come that far? Have the benefactors with the printing presses really turned against us entirely? Are they that offended by a "little" inflation?
Those are among the most pressing questions for traders nearly halfw
Mr. H, Please don’t drop the sarcasm, dry humor, or satire. We definitely need more sarcasm in our current neurotic uptight politically correct culture. I don’t always agree with everything, for example Ur affection for MMT, but that’s because I have an upper Midwestern value system.(I watched Archie Bunker with my Dad while growin’ up) Ur articles are always insightful and Ur recent article exposing crypto hype was rigorous and excellent !!
If MMT proponents would drop the “Theory” thing it would help. It’s not a “theory,” it just is. The government doesn’t need to source a currency it issues from you in the form of taxes and it doesn’t need to borrow a currency it issues from anyone else either. That doesn’t make any sense. It’s a contradiction in terms. I so wish MMT had never become “a thing.” It’s confusing to people. There’s no such thing as “MMT.” There’s just “how it works.” Plainly, the sole source of something (anything, really, it doesn’t have to be dollars or pounds or yen or a currency at all) doesn’t need to source that something from somewhere else. That thing (whatever it is) doesn’t even exist outside of the source and no one else can produce it. There’s no such thing as “US dollars” without the US government. If the US army wants five new tanks, and the Pentagon can convince Congress those tanks are necessary, the Pentagon will get those tanks. Contrary to popular belief, your taxes don’t pay for those tanks and neither does China through Treasury purchases. The money comes from thin air and then we retroactively pretend we paid for it by taking your money (taxes) or selling interest-bearing dollars (USTs) to China and Japan. I realize that’s a bitter pill for people to swallow, but it’s the truth.
… and, if I may add, a further aspect of MMT (“we can print/buy/afford whatever we want… till inflation occurs”) is sustained (I won’t say proven since it’s still descriptive rather than theorized) by today’s inflation.
There’s apparently a fair amount of economic debate as to how much fiscal COVID relief is to blame for present day inflation vs. supply chains disruptions, changes in good vs services consumption and the war in Ukraine. Still, it seems clear COVID relief is at least significantly responsible for inflation in the US (lower relief packages elsewhere led to lower inflation) i.e. retrospectively, it’s clear we printed too much money and it triggered inflation.
Fully as MMT described the limits of fiscal largesse.
Too bad congress doesn’t understand that MMT just is. Without them the country will never be able to unshackle itself from old concepts, like a flat earth, that are roadblocks to moving civilization forward. It’s frightening to think we are being held hostage by a small group of people who, for the most part, don’t have a clue because all their time is spent on taking care of themselves while they swear they are only concerned about the electorate. That’s not a theory, it just is.
Walt, I know you must be tired of repeating/battling the MMT issue but please keep doing it until people wake up to the facts of the matter. This is required because sadly the MMT issue will continue to be politicized to bludgeon the “libs”. The code for those who refuse to see the light is “upper Midwestern value system”
Money printing should be non-inflationary as long as the money is spent to sustainably grow the economy (not just create a “flash in the pan” increase in demand) or is spent to invest in R&D that can result in a long-term benefit to mankind (i.e. science, technology, energy).
The problem is when it is printed and used for a short-term reason that does not provide long-term benefits.
“ He’s cute, ain’t he? Only problem is, he’s got a little bit of Mississippi leg hound in him. If the mood catches him right, he’ll grab your leg, and just go to town. You don’t want him around if you’re wearing short pants if you know what I mean. A word of warning though: If he does lay into you, it’s best to just let him finish.” Cousin Eddie, Christmas Vacation, speaking metaphorically about the Fed in a high inflation period
Fantastic! MS leg hound. My first time. What a hoot.