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Modern Money Theory and You

Discussions about the economic and financial ramifications of PEAK OIL

Modern Money Theory and You

Unread postby evilgenius » Wed 30 May 2018, 12:01:01

Modern Money Theory is the idea that fiat currencies are not subject to local constraints. Governments are not domestic households that need to balance their budgets. They can deficit spend as much as they need. They will never run out of money.

The trick is whether the money supply is actually beholden entirely to government spending for its existence. I've spoken before about how borrowing from the bank creates money. Under the fractional reserve banking system the money supply both grows and shrinks in response to human activity. How does monetary policy effect that? It does so through interest rates. It imposes higher rates upon the economy by oversupplying the money supply, and using the offsetting tool of selling bonds, which causes a constraint upon the availability of money to seek those bonds. They will pay less for them, driving up rates. The increase in rates will shrink the level of borrowing. But what's to stop a government issuing money without going to the markets to sell bonds? According to Modern Money Theory, nothing. What it would do would be to induce more money supply growth. This could lead to huge inflation. It might be a possible tool when there are problems getting inflationary mechanisms going, adhering to a target rate in an economy that just won't grow that fast. But there remains a lot of danger in fields where there is a low or even a meager supply of workers. Those people could demand considerable pay for their services. You have to wonder what ratios, if any can be manipulated, would be the best approaches? Should a government stop the practice when only highly skilled positions are enjoying wage bargaining power, or ought they to allow unskilled positions to attain such power as well?

One thing to think about: If the government can create money from nothing, then why not set the opportunities of your entrepreneurs as your ultimate target? Why not make any person's opportunities possible? In other words. why not loan anyone who wants to enter a certain field what it takes to enter that field? If they want to become ride-share drivers, loan them what it takes to get a proper car and get set up. If they want to enter a certain aspect of construction, loan them what it takes to get that mini-excavator, trailer and assorted smaller tools. Why not look at opportunity the same way as we look upon student loans? Well, why not do that, and then take it to another level? Why not use the deliberate manipulation of interest rates to incentivize people to go into certain opportunities, by offering relief from the higher prices they would normally have to pay to get set up? I could say more right now, like how those who borrow should probably ought to agree to certain practices regarding employees, but that's not essential to this topic. I just wanted to bring this up and see what people think.
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Re: Modern Money Theory and You

Unread postby Cog » Wed 30 May 2018, 15:20:21

Loans are based upon the risk of being repaid. If you get a degree in gender studies for $100k, you are more at risk at defaulting than someone in a more desirable STEM degree.

Now back in 2007, banks made the decision that loaning money for sub-prime mortgages were no risk loans. Even though they knew they would default at a higher risk than conventional mortgages, the price of houses were going up monthly. You literally could not lose even with a foreclosure. But all of that risk was based on housing always going up. When it stopped going up, the risk assessment underlying those loans collapsed.
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Re: Modern Money Theory and You

Unread postby Outcast_Searcher » Wed 30 May 2018, 18:44:50

evilgenius wrote:Modern Money Theory is the idea that fiat currencies are not subject to local constraints. Governments are not domestic households that need to balance their budgets. They can deficit spend as much as they need. They will never run out of money.

That's a dream of many politicians, but it doesn't work that way in reality. Inflation can rear its head, as you mention. Too much spending can erode confidence in the currency. (Think banana republics).

I see lots of writing and statements in your post, but no citations. When I look up the topic, I see various books in different editions, papers defending the idea against critics, articles from sources like Wiki, etc.

If you're going to start a topic and make a bunch of statements, it would be real helpful to know what those statements are based on. (With so much material spanning decades (at a glance) I'm not sure where to start until I know where you're coming from.

Taking a quick look at Wiki, I find a lot to object to right away via the criticisms: section, which starts:

The post-Keynesian economist Thomas Palley argues that MMT is largely a restatement of elementary Keynesian economics, but prone to "over-simplistic analysis" and understating the risks of its policy implications.[25] Palley denies the MMT claim that standard Keynesian analysis doesn't fully capture the accounting identities and financial restraints on a government that can issue its own money. He argues that these insights are well captured by standard Keynesian stock-flow consistent IS-LM models, and have been well understood by Keynesian economists for decades. He also criticizes MMT for essentially assuming away the problem of fiscal - monetary conflict. In Palley's view the policies proposed by MMT proponents would cause serious financial instability in an open economy with flexible exchange rates, while using fixed exchange rates would restore hard financial constraints on the government and "undermines MMT’s main claim about sovereign money freeing governments from standard market disciplines and financial constraints". He also argues that MMT lacks a plausible theory of inflation, particularly in the context of full employment in the 'Employer of last resort' policy first proposed by Minsky and advocated by Bill Mitchell and other MMT theorists ...

So to summarize the criticism, it sounds like watered down Keynesianism with various serious flaws. Comments or insight?

I don't mind spending some time looking at this, but I don't want to waste time on it without some convincing defense, re the criticism above.

https://en.wikipedia.org/wiki/Modern_Monetary_Theory
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Re: Modern Money Theory and You

Unread postby evilgenius » Wed 30 May 2018, 19:50:45

It's precisely the Latin American style of overinflating the money supply that worries me about Modern Money Theory. I think that's where getting the intent, empowering entrepreneurs, right matters. I can see temptations there which people in power have problems resisting. Not that even steep inflation is hyperinflation. Hyperinflation only comes when the people lose faith in your currency and you have to offer so much of it to them to entice them to participate that it becomes ridiculous. There is more going on than the value or circulation of money in those cases. The leadership is often divorced from reality, or is so crooked that it won't bend when challenged. That being said, it isn't necessarily the case that terrible inflation would follow spending that didn't also seek balance in the bond market. It might follow that certain sectors of the economy would experience that. I wonder if targeting talented positions of different kinds would produce different results? Can certain positions receive interest rate relief over others? How much of an economy is walled off, so to speak, that, like when gasoline prices initially rise, people just suck it up, such that when certain jobs done in the economy rise in cost the economy wouldn't also suck it up? Economists have talked for a long time about a multiplier effect, where the money in the hands of some people does more through various channels than that given to others. I think this is usually when something like defense spending rises to a level where those who receive the government's money are more likely to borrow, increasing the money supply via the banking system. More defense related employees borrow than welfare recipients, I'm fairly certain. Would the success of certain people involved in a subsidized relationship with the government that guaranteed their probable success mean that they also would tend to borrow more? Can positions like teaching in regions where teachers don't make much be effectively boosted, at least over the period of student loan repayment, so that those people have more to spend? And, then, continuing education too.

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Re: Modern Money Theory and You

Unread postby Newfie » Thu 31 May 2018, 05:49:33

Once you start making these loans when do you stop? A guy wants to drive Uber, so you lend him the money for a nice car, but he doesn’t really work at it and can’t repay the loan. Now 10 of his buddies want the same loan, and they can’t repay it either. They demand it if the government to make things “fair.” Pretty soon it becomes a “free car” program.

Then there are so many Toyota Camrays they have no resale value so no poInt repossessing. Isn’t that sort of what happened to the housing market?
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Re: Modern Money Theory and You

Unread postby radon1 » Thu 31 May 2018, 06:16:46

Currencies are not the money, they are derivatives from the money. There is always single type of money in the world as long as no totally isolated groups of people exist anywhere. Currently, the US dollar is the money. Prior to that, gold was the money.

If a central bank prints unlimited amounts of a currency, at some point this will result in hyperinflation.
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Re: Modern Money Theory and You

Unread postby Outcast_Searcher » Thu 31 May 2018, 10:59:34

radon1 wrote:Currencies are not the money, they are derivatives from the money. There is always single type of money in the world as long as no totally isolated groups of people exist anywhere. Currently, the US dollar is the money.

I respectfully disagree with this in the modern world. The dollar may be called the "reserve currency" for certain things, but the FX markets and modern technology make that pretty meaningless to any entity (like a person, a company, a country) with a reasonable amount of money and intelligence.

1). With the highly liquid FX markets, entities can be net long (or short) virtually any basket of liquid currencies they want, and adjust that many times a day if they want, for a small commission. (Hate the US dollar? Be net short that and long whatever currency(s) one wants).

2). With the (generally) highly liquid major commodity markets in things like metals and energy and other resources, entities don't even need to be tied to any fiat currencies, aside from short term liquidity needs. (The people on this site that claim that oil or gold is the only real wealth, can be long those to their hearts' content, for example).

....

So there is "money" in terms of the idea of a store of value. Some "money" is much more liquid and stable in price than others. But to me the idea that the US dollar "is the money" is just wrong.

In, say, the 70's in the era of the rise of the petrodollar, the world was a VERY different place re technology. It often took a WEEK to settle simple financial transactions like ordinary US stock trades (much less complex international bulk commodity trades). Any entity with means no longer lives in that world.
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Re: Modern Money Theory and You

Unread postby evilgenius » Thu 31 May 2018, 11:33:26

Newfie wrote:Once you start making these loans when do you stop? A guy wants to drive Uber, so you lend him the money for a nice car, but he doesn’t really work at it and can’t repay the loan. Now 10 of his buddies want the same loan, and they can’t repay it either. They demand it if the government to make things “fair.” Pretty soon it becomes a “free car” program.

Then there are so many Toyota Camrays they have no resale value so no poInt repossessing. Isn’t that sort of what happened to the housing market?

I think that's a good criticism. What stops anybody who borrows money from reneging on their agreements? Isn't it the threat that doing so would have an affect upon their lives going forward?

Do you tell people 'no' simply to implement this process ahead of time, since you are certain they won't pan out? I think you can see how you can't discriminate like that. The proper assumption ought to be that you can't know ahead of time who will succeed and who will fail. Instead of trying to solve that problem directly, however, wouldn't it be wiser to adjust the package's availability according to supply and demand at one end, and the need to balance the economy at the other, together with their requisite rate structure incentives, or lack thereof (the simple existence of them as a borrower of last resort [having an impact upon the scourge of usury within the economy] meaning they are enough for a desperate person who meets whatever criteria have been set up for their entry into the program, even if that's a lottery).

You do have to accept that people will fail. That is the nature of entrepreneurship. It has to remain a stab at what might work. I think as opportunities to do real physical work go away with the development of artificial intelligence, this might become more and more important. In a world dominated by robots do we really want only big corporations operating all of the robots? Don't we want small entrepreneurs owning fleets of 10-20 self driving cars, which they probably lease out to some larger outfit? Don't you want small house building contractors who own robots that do things that correspond to the steps it takes to build a house, or remodel one? What about when someone comes up with a robot that picks peas all day in the hot sun and only does it for the cost of battery life? All of these opportunities take capital. In the world of tomorrow, as we are currently seeing it develop, those opportunities are going to go to the rich. That's just what happens when you have the kind of economic divide that America currently has. The government can change that.
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Re: Modern Money Theory and You

Unread postby Outcast_Searcher » Thu 31 May 2018, 12:06:36

Newfie wrote:Then there are so many Toyota Camrays they have no resale value so no poInt repossessing.


I will question this one statement, just due to my recent experience when I bought a new Camry that confirmed my overall experience. Used Camry's 3 to 5 year old were horrendously expensive, even with 50 to 70 thousand miles on them.

In the 30ish years I've been paying attention, cars like Camrys, Corollas, Civics, and Accords tend to have VERY high resale values since they're generally perceived as being so reliable.

OTOH, your typical GM and Chrysler models went for peanuts used, relatively speaking, due to the exact opposite reputation.

To me that's completely rational.
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Re: Modern Money Theory and You

Unread postby radon1 » Fri 01 Jun 2018, 11:15:51

Outcast_Searcher wrote: any basket of liquid currencies they want,


These currencies hold value solely by virtue of reference to the USD. If they drop this reference, people will abandon them and will not see them as value or as money. Same with commodities.
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Re: Modern Money Theory and You

Unread postby Outcast_Searcher » Fri 01 Jun 2018, 11:32:42

radon1 wrote:
Outcast_Searcher wrote: any basket of liquid currencies they want,


These currencies hold value solely by virtue of reference to the USD. If they drop this reference, people will abandon them and will not see them as value or as money. Same with commodities.

Nonsense. That's just an unsupported opinion.

If the US disappeared tomorrow, do you imagine that the rest of the world would magically stop all economic activity? That gold, oil, and other commodities would cease to exist or cease having value (via the demand for them)? That everyone would just lay down and die since the US is gone?

Or that the other currencies couldn't be valued against each other without the US dollar?

Don't confuse the fact that because the US dollar is popular and is a benchmark means it's the only thing of value or the only thing that matters.

Every day on the FX exchanges, over $5 trillion in currencies are traded daily, on average. Do you really think all those trades involve dollars?

There are now some oil futures that don't involve dollars at all. How is that possible via your theory?

Can you substantiate your theory beyond some random blogger?
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Re: Modern Money Theory and You

Unread postby evilgenius » Fri 01 Jun 2018, 12:00:38

Another way to ensure compliance with the intent of any sort of entrepreneurship program would be to give people scores. If they are paying back they get a certain number of points, or lack of points. If their ratio of debt to equity or earnings is under a certain level they gain the same. There could be a whole range of ways to improve a person's score. In this way things like ride sharing opportunities could be offered to anyone possessing a certain score. If you borrowed and were just playing the system your score would probably not qualify. In case you lived in Appalachia, there could be an appeals system.

An obvious secondary point of contention would seem to be; for whom can this program work? Is it simply for individuals, or for small, or even large, corporations? Since the Supreme Court has said that corporations are people, can we leave corporations out of it? That can work in people's favor, though. Getting involved in the program would mean that corporations would be bound to certain standards in relation to contractors and employees. It isn't just that they might have to become LGBTQ friendly, but that they would have to adhere to fair employment practices. Collectively, we would have to decide what those standards were. It is important, alone, that people enjoy a common understanding that levels the playing field.
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Re: Modern Money Theory and You

Unread postby radon1 » Fri 01 Jun 2018, 13:24:28

Outcast_Searcher wrote:
If the US disappeared tomorrow, do you imagine that the rest of the world would magically stop all economic activity?


No, but close to that. This would be an economic disaster. International trade would come to halt. As is economic activity.

Traditionally, money are taught to be have been adopted naturally, in the course of various exchanges between people. Some media with objective intrinsic value is taken as standard for exchange, and treated as money from that point on. However, this theory fails to explain a number of basic phenomena. For example, under this theory, people have no incentive to engage into trades, since the result of a trade would be net negative for them. Also, this theory cannot explain where profits come from. And a lot more.

In reality, money are not naturally adopted, but rather introduced forcibly. Broadly, an ancient warlord, once he subdued a handful of tribes around, needs to organize basic peacetime administration to manage his loot, taxation, military etc. He distributes functions between his courtiers, and issues tokens to award them and his military for service and provide for their upkeep. Any holder of tokens can receive certain goods in exchange for the tokens at the warlord's warehouse where the loot and taxes are kept. The goods are given at some arbitrary proportions set on whatever basis the warlord deems appropriate. These tokens become money. They have nothing to do with trade, with economic activity or with anything that we usually associate with money. Their sole purpose is administration management, they are purely subjective and have no intrinsic value.

The fact that the money greatly boost economic activity and become a storage of value is purely incidental. Let's say that for whatever reason, the warlord established the above proportions at 5 measures of crops or 2 bottles of wine for one token. People whose land is particularly good at producing wine will soon learn that they will get much more crops from the warlord's warehouse if they focus on producing wine and exchanging it for the tokens, than if they continue producing both wine and crops themselves (profits lurking?). The same situation is with the highly-productive crops producers. This happens to be due to the fact that the proportion above is totally arbitrary and subjective, from an "economic" point of view.

Soon they realize that they don't have to go to the warehouse, and can trade for tokens between themselves if this is more convenient. Then intermediaries turn up who offer trading right at the door step for a bit of discount, thus allowing to save on the trip to the warehouse. Thus proto-interest arise. Warehouse is kind of backing it, but gradually people forget about the warehouse and instead have the concept of money taking roots in their mind. They specialize and trade, and this happens to greatly boost the economic output.

The only ones that are not engaged are those who happen to have productivity at the exact 5:2 proportion crops to wine. They don't have an incentive to trade or specialize.

At some point, this monetary system meets another similar monetary system and they spend a bit of time figuring the way forward. The one whose higher labor intensive products are sold at a lower price prevails and its money becomes the common money. The money of the other system die off or become derivative. This process goes on to the present day.

Thus, only single money can exist in a connected world.
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Re: Modern Money Theory and You

Unread postby dissident » Sat 02 Jun 2018, 16:19:14

radon1 and his idol, the US dollar.

Are you for real? The BS you have posted is some of the most idiotic nonsense ever on this board.

Each fiat currency out there has its own confidence level independent of the US dollar. That is why we have a currency market and currency exchange rates in the first place. If global fiat was a one-parameter function of the US dollar then such a market and exchange rates would not make any sense.

Central banks accumulate reserves independent of their prime lender role in the financial system of any country. They could accumulate palladium alone, or silver or gold, or the Chinese yuan. If you are going to argue that financial instability applies to all currencies except for the US dollar, then you are utterly clueless. For now the US has a special place where the US dollar does not react much to financial shocks. But that is because there is so much global demand for it. It has nothing to do with the role you are ascribing to the dollar. The British pound is also immune to shock devaluations. Don't even try claiming that the pound is some slaved currency that is meaningless without the dollar.

You are basically claiming that the global GDP exists only because of the US. You are clearly out of it, in a really bad way. The global GDP exists because of humans. And most humans reside outside the US.
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Re: Modern Money Theory and You

Unread postby Outcast_Searcher » Sat 02 Jun 2018, 17:04:27

radon1 wrote:For example, under this theory, people have no incentive to engage into trades, since the result of a trade would be net negative for them. Also, this theory cannot explain where profits come from.
I

No, absolutely wrong.

First, again, you're not citing anything for your ideas. What do you base such things on except your intuition? If no credible citations, why is your intuition better than anyone else's, economic theory, and the way the world works?

Second, look up "comparative advantage". That's MUCH of the basis for trade and modern economies. You can't imply all trades are of the same relative value to people (at least not with a SHRED of credibility).

Some examples:

Gasoline is worth a hell of a lot more to me than what I must pay for it at the pump, since I can't refine it, or even reliably produce the oil it comes from.

Large textile mills which make shirts value the shirts they sell LESS than the money they get for them, since they are generally very efficient at making shirts.

Oil frackers (despite the nonsense bandied about by many doomers) value the oil they frack less, OVER TIME, than the dollars they get from that oil, or they wouldn't produce it, as they'd lose money doing so. (Somehow the oil industry has recently been generating massive profits overall, despite the doomer claims they're going "bankrupt" due to oil fracking).

Add thousands of examples to this, and you have the way the modern global economy works.

Use examples like chickens vs, shirts or gold vs. wheat, and you might have examples from a very ancient economy which might have used gold as money.

This also explains where profits come from. If a shirt, bullet, gold, oil, etc. producer makes their product efficiently enough that over time, it costs them less to produce it (in total) than they receive from it in the marketplace when selling it -- then, wala, they make a profit.

It's not magic. It's actually very simple. And there is a science, which among other things, describes things like this: it's called economics. It used math and definitions and everything.
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Re: Modern Money Theory and You

Unread postby onlooker » Sat 02 Jun 2018, 18:45:20

Yes, I think inflationin the US is being reigned in by these long lasting very low interest rates which has allowed Demand to stay vibrant and of course the US being the global reserve currency helps. Which leads to the post by Dissident which I fully agree with. The economic acitivity of the world does not hinge on the US dollar nor does the value of all the many currencies. On the other hand, as Dissident pointed out the remarkable strength of the US dollar is due to the US traditionally strong Economy and its status as the global reserve currency and Petro dollar keeping demand for the Greenback always high

Now. on a more general note, MMT in my opinion has been ultimately self serving. The Banks and banking industry have made out like robber barons. The proof is that we have now have an entire planet under onerous Debt .  Leaving the Gold Standard has allowed the Federal Reserve  to constantly manipulate  interest rates, lending and the money supply.  But it has led to a country whose economics is controlled wholly by the financial sector and  where investments decisions have been ever more dubious because of all that  loose free flowing and abundant lending ie. money.  This in turn is totally distorting the interactive sound economic discipline of price discovery.  But, even more grievous is that MMT has been forced upon the world via Structural Adjustment Programs and Institutions like the World Bank , IMF and WTO. Whole economies have been sacrificed at the altar of economic growth, which is euphenism for the rich ie. rich countries exploiting the poor ones. So, to finalize, MMT to me is emblematic of the Capitalistic exploitation and profit making fervor that allows the powerful to make up rules of the game which ultimately and consistently favors them. Oh and Outcast you want citations read "The Case against the Global Economy and for a Turn toward the Local"
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Re: Modern Money Theory and You

Unread postby radon1 » Sat 02 Jun 2018, 19:32:57

Outcast_Searcher wrote:
radon1 wrote:For example, under this theory, people have no incentive to engage into trades, since the result of a trade would be net negative for them. Also, this theory cannot explain where profits come from.
I

No, absolutely wrong.


Take a pen or pencil and show how this is wrong. IOW, demonstrate mathematically, how individuals in a closed system in a state of equilibrium can pick an item as money and generate profit engaging in trades that are Pareto improvements. Or find an economist who demonstrates it in terms of mathematical logic rather than general non-binding non-conditioned deliberations. This demonstration could serve as an illustration of the traditional money theory and your own "value storage" mantra.

Your own examples have nothing to do with a closed system, with the state of equilibrium, and money are already available in them, like deus ex machina.

The actions of some barbaric middle eastern warlords a few thousands years ago is the principal thing that distinguishes us from the Amazonian tribesmen.

Economics does have significant achievements in a number of individual areas, but in terms of explaining the overall picture it is sort of an etp-like trash.
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Re: Modern Money Theory and You

Unread postby Outcast_Searcher » Sun 03 Jun 2018, 12:48:42

radon1 wrote:
Outcast_Searcher wrote:
radon1 wrote:For example, under this theory, people have no incentive to engage into trades, since the result of a trade would be net negative for them. Also, this theory cannot explain where profits come from.
I

No, absolutely wrong.


Take a pen or pencil and show how this is wrong. IOW, demonstrate mathematically, how individuals in a closed system in a state of equilibrium can pick an item as money and generate profit engaging in trades that are Pareto improvements. Or find an economist who demonstrates it in terms of mathematical logic rather than general non-binding non-conditioned deliberations. This demonstration could serve as an illustration of the traditional money theory and your own "value storage" mantra.

Your own examples have nothing to do with a closed system, with the state of equilibrium, and money are already available in them, like deus ex machina.

The actions of some barbaric middle eastern warlords a few thousands years ago is the principal thing that distinguishes us from the Amazonian tribesmen.

Economics does have significant achievements in a number of individual areas, but in terms of explaining the overall picture it is sort of an etp-like trash.

So you're not talking about the real world? You're talking about some theoretical closed system?

Why don't you show us how there is no comparative advantage in the real world? Or how no one can make a profit trading things (like oil for money or money for shirts) in the real world?

Because that's what I'm talking about. And unless I missed it, that's what the real world economy has been demonstrating happens on a normal basis since good records were kept. And though we lack sufficient specific records to be sure, written history certainly indicates that has been going on a long time.
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Re: Modern Money Theory and You

Unread postby radon1 » Sun 03 Jun 2018, 16:31:49

Outcast_Searcher wrote:So you're not talking about the real world?

Couple clarifications. You asked me to elaborate on my point and I did. I used an example from ancient history, and I didn't particularly like that I had to use it. I thought about how I could avoid it and concluded that I couldn't. For 2 reasons: 1) In order to describe the nature of money, you have to describe its origins as they are one and the same, and this was the point that I was asked to discuss. 2) The present state of the economy, the so-called "real world" is path dependent, i.e. it is a function of its previous states. IOW, in order to describe it, you need to describe the preceding state, and then the further iteration and so on until the starting point. And the starting point is the point of the introduction of money.

I repeat - look at your example. In order to be able to describe profits, you had to introduce in your description: 1) a factory, 2) gasoline, 3) pump, 4) oil etc. All these complex open-ended things in order to present the simple concept of profit. They give rise to lots of questions: who builds the factory and why? Who produces gasoline and why? Who delivers oil and why? etc. Unless you answer all these questions, your description of profits is incomplete and useless. Consider that you trying to explain this to an alien or an Amazonian man.

Taking step forward, you'll probably say that the factory has been built because somebody received profits in the process. So, you receive profits now because somebody received profits in the past, i.e. your description is actually circular and as such meaningless, like "profits as output is when we have profits as input and then we will have profits as output". This is what your examples boil down to.

Overall, I don't understand the point that you are trying to make and how this relates to the discussion initiated in the opening post of this thread. Not that I particularly care.
Last edited by radon1 on Sun 03 Jun 2018, 17:04:57, edited 1 time in total.
radon1
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Re: Modern Money Theory and You

Unread postby radon1 » Sun 03 Jun 2018, 16:44:42

dissident wrote:

You are basically claiming that the global GDP exists only because of the US.


There is no global economy incorporating the US economy. There is the US economy that has spread over the world and became global. It depends solely on the consumption of the US consumers. And if they suddenly decide to take off from this planet for greener pastures elsewhere, this will result in a dream scenario for fast-crasher doomers. Come to terms with it, and start using your brain rather than your inner political chestbeater.
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