Back in February 2021, I sat down with Ron Biscardi, the CEO of iConnections to talk MMT, the incoming Biden administration’s policies, capacity constraints, the problem with relying on interest rates to fight inflation, and more.
It seems, unfortunately, that the Biden administration are … ahem… ‘unable’ to use policies like negotiating lower drug prices or making sure *everyone* can benefit from free child care to offset inflation on other things and rising cost of Gas. When I say “unable” I find it hard to believe that the administration is not using the corporate Democrats (most notably Manchin & Sinema) as cover for their own lack of enthusiasm for more progressive policies. They didn’t really try hard at all to get them in the final version of the BBB Bill which says it all really. So, the intransigence of said Senators did Biden & the leadership a favour. Their past record tells us as much and it also says a lot that the second most costly item in the bill is the SALT Tax provisions, but nobody is wringing their hands over whether that’s “paid for” or not.
It’s a massive, intentional, missed opportunity. The voters (or rather *non* voters) will punish the Dems in the Mid Terms and 2024.
Dr. Kelton, how does the EEU (Euroland) increase it’s money supply? It is not as apparent as the MMT explanation of the US primary source and method of increasing the primary money supply.
The EU has its own “money printing” bank : The European Central Bank, which operates in the same way as the Fed in the US and The Bank of England in the U.K.
So now we know that the government does not fund itself with taxes, which is indeed a great insight. But this confronts us with a new question: what is it that makes a strong currency vs a weak currency? And this is the real rub. Indeed, a country that has a strong currency can always keep spending to its heart's content, since there is always a market for its currency at an advantageous price. Most other currencies are subject to the scrutiny of traders who watch the ability of the issuing government to avoid inflation. And this becomes then the important variable. When a government "over spends" in its own currency it will automatically reach an "inflation point". The reserve currency, on the other hand, is unlikely to reach this point. Where there is a great danger for the USA is losing the reserve currency status and this will happen when currency traders lose confidence in the issuing government, which could happen if the issuing government goes rogue. Today the US is weaponizing its currency and this is going to make more and more enemies until something gives. In fact investors are diversifiying out of the dollar for that reason, investing in gold, as well as a spread of alternative international "sovereign" currencies as a hedge. It is ironic that Americans do not have an easy way to buy gold. In the EU gold coins, bars and ingots are for sale at the retail banking window of virtually all banks. In the USA gold is held at Fort Knox, with only specialized firms dealing in the gold itself. There is a big difference in the integrity of these gold dealers and a Central Bank. One has to wonder how many wealthy Americans have opened overseas accounts for the sole purpose of easily diversifying into gold.
It seems, unfortunately, that the Biden administration are … ahem… ‘unable’ to use policies like negotiating lower drug prices or making sure *everyone* can benefit from free child care to offset inflation on other things and rising cost of Gas. When I say “unable” I find it hard to believe that the administration is not using the corporate Democrats (most notably Manchin & Sinema) as cover for their own lack of enthusiasm for more progressive policies. They didn’t really try hard at all to get them in the final version of the BBB Bill which says it all really. So, the intransigence of said Senators did Biden & the leadership a favour. Their past record tells us as much and it also says a lot that the second most costly item in the bill is the SALT Tax provisions, but nobody is wringing their hands over whether that’s “paid for” or not.
It’s a massive, intentional, missed opportunity. The voters (or rather *non* voters) will punish the Dems in the Mid Terms and 2024.
Very interesting exposé.
Dr. Kelton, how does the EEU (Euroland) increase it’s money supply? It is not as apparent as the MMT explanation of the US primary source and method of increasing the primary money supply.
The EU has its own “money printing” bank : The European Central Bank, which operates in the same way as the Fed in the US and The Bank of England in the U.K.
So now we know that the government does not fund itself with taxes, which is indeed a great insight. But this confronts us with a new question: what is it that makes a strong currency vs a weak currency? And this is the real rub. Indeed, a country that has a strong currency can always keep spending to its heart's content, since there is always a market for its currency at an advantageous price. Most other currencies are subject to the scrutiny of traders who watch the ability of the issuing government to avoid inflation. And this becomes then the important variable. When a government "over spends" in its own currency it will automatically reach an "inflation point". The reserve currency, on the other hand, is unlikely to reach this point. Where there is a great danger for the USA is losing the reserve currency status and this will happen when currency traders lose confidence in the issuing government, which could happen if the issuing government goes rogue. Today the US is weaponizing its currency and this is going to make more and more enemies until something gives. In fact investors are diversifiying out of the dollar for that reason, investing in gold, as well as a spread of alternative international "sovereign" currencies as a hedge. It is ironic that Americans do not have an easy way to buy gold. In the EU gold coins, bars and ingots are for sale at the retail banking window of virtually all banks. In the USA gold is held at Fort Knox, with only specialized firms dealing in the gold itself. There is a big difference in the integrity of these gold dealers and a Central Bank. One has to wonder how many wealthy Americans have opened overseas accounts for the sole purpose of easily diversifying into gold.