Trade wars. Inverted yield curves. NIRP. Negative interest rates. The Federal Reserve cutting rates. Quantitative Easing. It can get rather confusing out there in these times of economic and financial turmoil and transition. It’s quite clear the world is reaching out for something new. A new system.
Enter MMT. MMT stands for Modern Monetary Theory. It is an economic and political ideology that is picking up in steam over the last handful of years. The argument is essentially the following: any political body that controls the printing of its own currency can simply print the money it wants or needs to function.
According to MMT theorists and the politicians knocking each other out of the way to climb aboard the MMT train and take credit for “giving it to the people”, all one needs to do is crank up the engines and implement Helicopter Money and all problems shall be solved.
There are numerous questions about MMT the most obvious being who really pays for this and how this could possibly NOT stoke inflation and ultimately hyperinflation. Proponents counter by saying deficits don’t matter when you control your own currency and even matter less when you have the so called “reserve currency status”.
It is certainly not that easy and certainly does not eliminate all problems such as trade wars and yield curve inversion and markets projecting economic weakness. Supporters are holding firm to the notion that is viable though, and many of them of course are politicians. What politician wouldn’t want unlimited funds to simply print from thin air to hand out in efforts to bribe people and organizations into supporting them?
There is some “research” on MMT. It is both supportive and critical of MMT and many point to japan as a potential example and reference point.
One thing is for sure: there is no free lunch. There never has been a free lunch and there never will be. The current system MUST, it’s not a maybe or negotiable, “create new money” to fund the existing “money”. The function of Money as debt is quite clear and even very apparent in the Federal Reserve Act.
The bigger question is how long society continues to allow centralized tyrants and crooked cronies to enslave humanity before simply finding another option that could actually help humanity such as Bitcoin.