Guest Post by Martin Armstrong
Yes, we are all connected and these people behind MMT are idiots. This is the same old story that we can just print our way out because we owe money to ourselves. That is a nice naive theory which reflects the ignorance of those behind MMT. At the end of 2018, foreigners owned about $6.2 trillion of U.S. debt or approximately 42% of the total national debt. Meanwhile, the American public/institutions held $16.1 trillion and 23% of the national debt. The sheer numbers available from the government prove what they are saying is NOT TRUE!!!!!! Their theory that MMT is possible because we borrow from ourselves is just absurd.
They assume that we can borrow indefinitely and just print money to cover the expenses. The fallacy here involves the simple fact that 42% of the debt is held by foreigners. That reality exists BECAUSE the dollar is the reserve currency as Europe is drowning in its socialism. Federally, the states have income taxes but not a consumption tax. In Europe, you have an income tax that is higher than the USA by at least 20%, and then on top of that, you have a 20% VAT consumption tax. Additionally, there are mountains of municipal taxes and all sorts of regulations and fees.
The USA has the biggest consumer economy because the consumer is left with nearly one-third more of their income as disposable to spend compared to Europeans. Add the fact that the USA also has NEVER canceled its currency and therefore the US dollar is used internationally. About 60% of American dollars all circulate outside the United States. Clearly, MMT would also disrupt the entire world economy.
The theory that QE proves them correct is seriously wrong. The world is in a deflationary trend. The dollars are in HIGH demand because it is going nuts everywhere else. The increase in the supply of dollars has NOT been inflationary only because the world is sucking them up. They do not understand the demand is global, not domestic. Remember the Money Plane? Skids after skids were being shipped outside the USA of $100 bills to supply the demand worldwide. When that demand shifts, their entire theory of MMT will blow up in their face. QE is not proof that what they propose can work. They are ignoring the international trends that are supporting the dollar right now.
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MMT? EBT?
EQUAL?
Modern Monetary Theory.
aka “Magic Money Tree.” 🙂
Armstrong says “the USA also has NEVER canceled its currency .” I have no idea what currency cancellation is, but the U.S. defaulted on the dollar three times, the last being gold confiscation and revaluation in 1934.
And what about the change from certificate to note in ’71? All the bastards still alive who ruined our currency should be hung from gallows at the Capitol bldg.
Don’t like it, but it’s coming. Why? Because there is no other way to stave off the global downturn that’s heading our way. QE has come and gone, there is no way to use the banking system to make the economy look good. The last resort will be “helicopter money,” or stimulating the markets by direct infusion of paper money into the hands of the AOC people’s army (who by the way think they deserve it), to keep the economy rolling along just long enough, for all the elite to jump into their escape pods and land in their own little high security bomb shelters and wait out the coming chaos.
This was the most likely course for our future before MAGA gave us some hope and today, it’s practically at our doorstep. Just think for a moment how this will be sold to the sheeple; finally, all that money that was given to the evil rich people will at last be given to you! You deserve it. You earned it as reparations for how badly you were treated by all the Wall Street fat cats. So fill your hands with it, go out and spend like crazy for, “we’re in the money!” It’s the roaring ‘20’s all over again, forever!
For the rest of us, hunker down and prepare for…….
MMT simply does not work and there are many countries that have or are failing right now. Zimbabwe, Venezuela are two recent cases where their currency is hyperinflating. Yet MMT or MMR advocates will still plow their crazy theory. Why? Because most people around the world do not understand finances and want to be told everything is ok and what we the establishment are doing is trying to save you the people and they believe it!!!
The dollar for oil routine is winding down as more and more countries are settling in their own currencies once Obama threatened the SWIFT system and the SWIFT system caved to the US pressure. You can also settle in EU and the Chinese currency now as well. Alliances have been made and oil is now selling for rubles, Iran currency as many countries are circumventing the dollar for oil system around the world. The ASEAN partners are setting up their own system as well.
The world is tired of our financial shenanigans, The EU is even in worse a worse situation and they are still doing QE to finance their handouts. I wonder where the MMT folks will be when the financial walls start crumbling all around them. MMT does not work and if you do not believe me go look back at all the country defaults including ours throughout history. Where was MMT then?
When public pensions hold 80 plus % of government debt, look for it all to go belly up.
It’s the scam what am.
So, MMT, what the hell is it? If you’re going to piss on it, shouldn’t you define it first.