MMT Need Direction

[harbormaster]

https://www.investopedia.com/modern-monetary-theory-mmt-4588060

This made mainstream news tonight. I am not a fan of conspiracy theories but this one is history repeating itself. So how does one prosper ?

[ChuckD]

This is not really history repeating itself - I am unaware of this theory ever being used by a country who controls the Reserve Currency. I believe that what we are seeing now with HUGE international spending plans is actually our government furthering the creation of a market for and addiction to US dollars. As long as foreign countries are accepting USD and furthering its necessity it will continue to last. Of course it can't last forever . . . but it can last a long time yet (our lifetimes).

You ask how to prosper, that's easy - quit your job and found a NGO, then pay off a Congressman to get US government funding for some hairbrained scheme, then pocket the money and close the charity. Repeat as needed.

[harbormaster]

The repetition in history is that to Germany in the 20's and 30's. There are more then monetary policy variations too;

- hatred of the elite / rich
- hatred of the police
- decriminalization especially if the victim isn't protected;
- power to the government
- division of races and ideologies;
- massive creation of wealth among small groups
- masses chasing the dream taking uncanny risks;
- creation of a poor social class not keeping up with society

The MMT might not be a history repeating itself but these elements are consistent with pre collapse Germany.

[870classic]

Wait, What ?.!?
Our nation's money is not backed by anything other than our ability to make debt payments? Bummer.

All kidding aside, as long as the illusion continues, and no one looks behind the curtain, the ponzi scheme will continue. This is a great reminder to get your household out of debt, stay away from future debt, and build up an emergency fund.

Thank you for sharing.

Best regards,
870classic.

[harbormaster]

But wait 870, if they are going to inflate isn’t debt at fixed low rates a good thing?

[ChuckD]

The repetition in history is that to Germany in the 20's and 30's. There are more then monetary policy variations too;

- hatred of the elite / rich
- hatred of the police
- decriminalization especially if the victim isn't protected;
- power to the government
- division of races and ideologies;
- massive creation of wealth among small groups
- masses chasing the dream taking uncanny risks;
- creation of a poor social class not keeping up with society

The MMT might not be a history repeating itself but these elements are consistent with pre collapse Germany.

I agree that most of those things are repetitive (the one that's not is hatred of police; in 1930's Germany almost everyone loved the police and trusted the police to protect them . . . right up until the police led them to the boxcars for their own good. Currently roughly half of our country hates the police and the other half adores them and trusts them as much if not more than the 1930's German's trusted their police. What I find odd in our situation is that the half that hate the police love the government they serve and want it to grow while the half that adore the police do not trust the government they serve and want it smaller.)

What is different, especially in respect to monetary policy is that the USD is the Reserve Currency and we send our dollars in aid money all over the world creating a demand and an expectation for USD. The end result is inevitably the same, but the time it takes to get there will be much longer in our case.

[ChuckD]

Wait, What ?.!?
Our nation's money is not backed by anything other than our ability to make debt payments? Bummer.

All kidding aside, as long as the illusion continues, and no one looks behind the curtain, the ponzi scheme will continue. This is a great reminder to get your household out of debt, stay away from future debt, and build up an emergency fund.

Thank you for sharing.

Best regards,
870classic.

Harbormaster is right, if you are truly convinced that massive inflation is eminent the best course of action would be to leverage debt to acquire as much commodities as possible (real estate, precious metals, ammunition, food, etc). Of course if you are wrong you will be forced into bankruptcy and financial ruin.

[ChuckD]

Thought I should add - for inflation to occur it requires the cost of goods increase at a faster rate than the rate of increase of GDP . . . the easiest way to increase currency and keep inflation low is simply to have government set and control the price of goods. Beware when you start hearing people suggest things like fixing prices to offset inflation.