MODERN MONETARY THEORY - can anyone explain major differences between MMT and current monetary system?steemCreated with Sketch.

in hive-175254 •  29 days ago 

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INTRODUCTION

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For the past several months, my personal interest with business and economy (both in micro and macro scale) have been growing rapidly. There isn't a day that goes by that I would not learn something new - it is a fascinating and complex world, full of unknown relationship and constantly evolving.

And every now and then I encounter topics, which are often initially to difficult to understand - I've spent hours trying to figure out what QE (quantitative easing) or REPO markets are about. And while I've been researching those two terms, I bumped into a new one: MMT (modern monetary theory).

And I must admit, that more I learn about it, the more confused and unsure I was about how this model could potentially work and what consequences we should all expect if MMT would ever gain more popularity. And it seem that it's popularity is only growing.

So today, I would actually like to ask you, dear readers, to share with me your knowledge and view on that particular topic.

MODERN MONETARY THEORY - a few questions

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Most of all, I found it important to understand what problems MMT does try to solve and what challenges it will face ahead. How is it different from the current monetary system and how could it affect businesses and life or regular people.

I would also like to know, what are the threats to the "current state of things" if MMT would ever be introduced? Are there any real advantages and disadvantages of this solution? What risks and benefits would we be all facing?

I cannot stop but wonder if MMT will impact stock markets, inflation, property markets and ... crypto. And if it does - what kind of impact should we expect?

Those are some of questions I've been asking myself. Hopefully some of you, dear readers, have the necessary knowledge and willingness to share it with me and others.

SHARE YOUR THOUGHTS AND EARN SOLID UPVOTE

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I really love to hear your opinion on that particular topic. And I'm planning to reward all most valuable comments with a solid upvote (150k SP) from @project.hope to show my appreciation.

Please resteem. And note that all rewards (50%) from this post will be transferred to @ph-fund - to support @project.hope. So be generous with upvotes :)

Yours, Piotr

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  ·  29 days ago (edited)

@crypto.piotr

Money lies at the core of most of the problems in this world and I have also found it to be one of the most interesting topics to discuss. To write a comment on it myself would most likely be the start of a book. I'll keep it simple and just refer to the people on the forefront with their different theories.

First there is the gold standard advocates which include people like Mike Maloney and G Edward Griffin:

  • Mike has a 9 part documentary not only explaining our current monetary system but also attempts to give the correct definition of money.
  • G Edward Griffin has a more sinister explanation and wrote a book on it called The Creature From Jekyll Island in which he explains the creation of the current monetary system. I have found that his explanation of the monetary system (1 hour 27 min) is probably the best there is (my opinion).

There are many more in agreement with the above to name a few:

  • The Dollar Vigilante
  • Max Wright
  • And many more that's interviewed in Mike Maloneys video but I feel that their explanations are just water downed versions of what Mike and Edward talks about. In some cases I've even seen these so called advocates of the gold standard use the information to run their own scam investment programs so I stay away from them.

On the other side we have the money policy advocates. A group of people who believe that the wrong policies are what brings about abundant and dire times. I have not seen a lot of them making videos on the subject but I have come across a few who have tried to explain it in simple terms. Bill Still explain his position in The Money Masters. In my view the petro dollar will fit into this system but it gets complicated.

These two ideas are fairly different from each other and attract a lot of debate but one obvious similarity is the fact that at the head of this beast there is a puppet master pulling the strings.

For me it is not a matter of consensus among the slave population to correctly define words or the workings of systems but the understanding that there is a slave master driving you into the ground and stealing your wealth.

Thank you for your amazing comment @dpl

Indeed, money lies at the core of most of the problems. However without money there would be most likely even more problems we all would have to dealt with - just different ones :)

To write a comment on it myself would most likely be the start of a book.

Good one :) Can I sign up for your book already :)

ps. didn't you consider powering up?

Yours, Piotr

@crypto.piotr

It is debatable as the current system is most corrupt. It's like saying we need government because who will build the roads...

Just tried something with my steem. That's why it was not in power up mode :-)

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  ·  29 days ago (edited)

I did read up on MMT some time back. The key difference between the current system we have is that it believes that countries with a fiat currency system can and should print as much money as they need to spend since they will never go broke.

In contrast, the current system believes that governments spending should be funded through taxations and issuance of bonds.

Under the MMT, the central bank will no longer need to manage interest rates as it will always be kept a fixed level (e.g. 0%). Overall greater responsibilities will be on the government.

Will be happy to have an open discussion on this topic

Hi @culgin

Thanks buddy for always being so responsive and helpful with your comments.

The key difference between the current system we have is that it believes that countries with a fiat currency system can and should print as much money as they need to spend since they will never go broke.

That part I already managed to understand. However Im not sure how does MMT plan to combat extreme inflations caused by constant drop of value of printent FIAT currency.

Yours, Piotr

The fact is nobody can be certain that the system can prevent high/hyper inflation. The most compelling argument I read so far is that the government will be able to regulate the inflation level through efficient allocation of money and taxations

MMT really relies on an efficient government, which so far I haven't really seen one. The government here in Singapore is probably among the most efficient, but I am not confident MMT will work even under the Singaporean government

If government is involved-- or if there's a political "theory" propping it up-- it's wrong. http://blog.kentforliberty.com/2009/11/requires-no-government.html

  ·  29 days ago (edited)

Hi my friend,

This is indeed a very interesting topic and I believe that people who believe in MMT simply never went through a period without relative money stability.

It is funny that this theory comes from people living mainly in developed countries. This theories only works as long as there are no foreign depts...

MMT doesn't produce inflation, it produces bubbles that pop

Of course it is possible to always create more money supply by printing it directly through the central banks or through dept creation by normal commercial banks. The more money available in a system the more you devaluate it. This means that for an even amount of goods the amount of money available increases which should lean to a devaluation of the money.

MMT believes that a country can always print new money but it is simply blind. The more money that is printed, the more we assist to a bad allocation of assets. Meaning the money will always go where the ROI is highest. It will go into share markets or real estate or bonds, accordingly...
This means that we don't see a continuous depreciation of the money, it fills a bubble and the depreciation will only occur when this buble pops.

MMT and foreign dept = potential for major crises

Imagine a country that prints and prints more of its currency to pay back its depts. Of course it can print always more but currencies are interlocked between each other. You are a foreigner and you see that the money supply of this country is growing and growing. You expect inflation and you will sell assets of this country. This means that there will be a sale pressure on this currency and a loss of price compared to other currencies. This means that if this country has depts in foreign currencies then this dept will increase in value drastically. It will be impossible to print always more currency because the more that is printed, the less it will be worth and the foreign dept will increase. Just some examples of that: Venezuela, Argentina, Turkey...

A currency that is printed according to MMT will be worth nothing in the long run

So I would keep my hands away from any currency that is created according to MMT. I would advise to invest in BTC that has a very limited supply or in Swiss Francs, probably the most stable Fiat currency and a governement behind it that by law is compelled to keep dept under control.

Best regards,
Achim

Our current banking system, in which money is created out of thin air each time a loan is granted, is essentially printing money. I guess the difference between fractional reserve lending and MMT is that with fractional reserve only the banks really benefit. With MMT more of us may benefit.

Interesting point. But remember, "more of us may benefit" owing to money that is printed out of thin air. Those benefits might feel good, but they're all based on nothing more than thin air.

In other words, MMT can have certain short-term benefits, but at what cost. MMT and QE and money-printing are by their very nature unsustainable.

Regardless of any benefits, I'm expecting the worst.

Trouble is that fractional reserve lending does the same thing--creates money out of thin air. The difference is that a loan is supposed to be based on some value-add that will allow the borrower to repay the principle and interest. It is worth watching Money as Debt on YouTube for how this works as well as reading the critiques and director's responses

Exactly. I find it strange when those who rely on / support fractional reserve banking turn around and excoriate those who promote MMT.

Thanks for the link to "Money as Debt." I'll give it a look soon.

Dear @majes.tytyty

Regardless of any benefits, I'm expecting the worst.

In long run I would also expect the worst.

Yep. Hang on tight!!

Thank you for dropping by @toddrjohnson and sharing your thoughts.

ps. did you give up on posting on steemit ?
Yours, Piotr

Thank you for your amazing comment @achim03

Very informative. And you shocked me when you mentioned that MMT doesnt produce inflation. I always thought that increased supply (over demand) will lower value of FIAT currency. And as such - it would create inflation.

Meaning the money will always go where the ROI is highest. It will go into share markets or real estate or bonds, accordingly...

If money would end up in property market, then it will increase cost of rent. And that will impact prices of everything. Wouldn't it be ... inflation?

The more money that is printed, the more we assist to a bad allocation of assets

You nailed it! Again big thx for your feedback.

Cheers, Piotr

In a way we are already living in a world of MMT with QE and as a result I always wondered why there was not more inflation. I believe it is because the inflation is kind of hidden within bubbles but when these bubbles explode we will have the same results as if we would have with an increased inflation. I saw this in Turkey. A simple tweet from D. Trump about taxing steel was enough to produce a devaluation of the currency of 20% within a couple of days.

Instead of coming little by little the inflation manifests in bursts and is therefore much more dangerous and imprevisible.

Best regards,
Achim

Some economists wish to make the governments all mighty. They think governments have all the solutions of the problems related to economies. These economists are the proponents of Modern Monetary Theory. It is not different from the current monetary system. In fact, these are very similar. There is only a difference of the name.

Dear @akdx

Thank you for always being so responsive

ps.
I seriously wonder how MMT would deal with inflation (losing fiat currency value). After all inflation is nothing but 'hidden tax', that can destroy economy and businesses. Just like tsunami would.

Also Im curious how countries following MMT monetary system would deal financially with those who stick to traditional/current ways. Something would surely have to change.

Yours
Piotr

  ·  29 days ago (edited)

You don’t have to be bewildered with it, @crypto.piotr. It’s just another terminology manipulation, as it is usually done in the Centralized Hierarchical Political Matrix (CHPM). Orwell called it doublespeak. or newspeak You see, CHPM uses terminology to cover up repeating robbery. For example, at the beginning of the 20th Century, if you came to the bank to raise your money, and the bank could’t return your full amount and interest, that was called a Bankruptcy, or Default. Today it is called Negative Interest Rate Policy (NIRP)! In the 20th Century, excessive emission of the fiat money was called Inflation. Today it is called Quantitative Easing or REPO. MMT is just another name for a blind robbery created through the globalist economic system.

I would suggest to follow this man:

It's the job of politics to make people accept and live with, tolerate the economic system even when it gives them a rough shake.
— professor Richard Wolff

He is explaining it clearly and logically. You can start with these important lectures:

https://steemit.com/informationwar/@lighteye/richard-wolff-explains-how-politics-work-in-the-us-of-a

https://steemit.com/informationwar/@lighteye/the-roots-of-fear-of-a-humane-idea-in-the-united-states-of-america

https://steemit.com/informationwar/@lighteye/instability-of-capitalism

Good luck!

I very much agree with your explanation. I truly believe the decentralized monetary system is already establishing and it is up to us here to support its functionality. As I'm more with technology understanding than economical cannot give more profound clarification of the main topic.
It is an interesting discussion although.

Thank you, @trayan

Thank you for dropping by @trayan and your comment.

Thank you for your amazing comment @lighteye

I will take your advice and I won't be "bewildered with it" :)

Thank you for sharing those links with me.

ps.
I would also like to take this opportunity to share with you one of my recent posts
, where I'm describing project.hope economy (I run it with few guys from steem). I would love, if you could invest few minutes and get familiar with our efforts and perhaps share your feedback (this is what I always care the most).

Yours, Piotr

Thanks for the invitation.
I haven't heard anything about the subject. But if this "idea" fell out of the minds of today's economists and politicians, it is time to quickly run away towards the crypt

Essentially, MMT is a misguided attempt to deal with insufficient government income / funds.

Typically, governments make money by collecting taxes or by selling bonds. MMT holds that needy governments do not have to collect more taxes or sell more bonds. There is a third way, and that's MMT.

MMT may be cloaked and disguised as a clever new policy, but for all intents and purposes, it's basically money-printing.

Certain overly clever central bankers such as Greenspan and Bernanke explicitly condoned MMT. In certain ways, they even resorted to it. They essentially said that they US had access to an unlimited supply of money, cuz it could simply print more and more.

But any fiat money, printed out of thin air onto valueless bits of paper or clicked into being by using a computer mouse, will eventually revert to its actual value – which is zero.

On the way, the money produced according to MMT will create bubbles and eventually hyperinflation. As well as lots of pain and misery for those who are impoverished by it.

Anybody who thinks that MMT is a viable alternative has her/his head stuck in the sand ... or else somewhere else dark and smelly. MMT is Magic Money Thoughtlessness.

Thank you for your amazing comment @majes.tytyty

governments make money by collecting taxes or by selling bonds. MMT holds that needy governments do not have to collect more taxes or sell more bonds. There is a third way, and that's MMT.

Somehow I don't see goverments being able to dismantle their own taxing system. That would also means massive amount of people, which would lose their jobs in administration sector. People noone else would like to hire.

ps.
I would also like to take this opportunity to share with you one of my recent posts
, where I'm describing project.hope economy (I run it with few guys from steem). I would love, if you could invest few minutes and get familiar with our efforts and perhaps share your feedback (this is what I always care the most).

I've read your recent memo and I'm aware of your lacking time. Take it easy buddy :) You may join our curation trail whenever you're ready.

Yours, Piotr

Good point. I believe that MMT does not advise govts to STOP collecting taxes or to STOP selling bonds. But if and when tax revenue plummets and when nobody buys the govt's bonds, then the MMT alternative (last resort) is to just print tons of money.

I'll open your link and read that post soon. And I'll also get to that curation trail ... sooner or later. :-)

Money is everything in the modern world. So, there are economists who thinks that the governments are free to print as much money as they wish and to counter inflation and state of unemployment governments should increase taxes and issue bonds to drain excess money from the economy. It all seems to me a bullshit as printing excessive money can be fatal to any economy as it increases inflation and also creates conditions of economic failure.

the only difference between mmt and our current corrupt monetary system is with the fed currently they give billions and trillions to their friends on wall street to get ever richer, pushing asset prices like property, stocks and bonds ever higher, while with mmt the fiat printed currency is given straight to the public (via tax rebates or direct bank deposits,) pushing the prices of every day consumer goods ever higher.

both result in inflation, both result in a widening of the wealth gap, both will result in a two tier society and poverty for most.

only a full gold standard (see mises et al) results in fair system for all, and we are never, ever going to have that until Jesus returns.

plenty there for the hopelessly deluded to get riled about, truth sucks for those living a lie. peace.

I think that it is a fascinating and complex world too. But now I'm only interested in the blockchain world

Thank you for dropping by @stefano.massari and your comment.

I just visited your profile and I've noticed that we're sharing similar passion towards blockchain. Cool :) Followed you already,

Yours,
Piotr

Thanks!!! Let’s go!

I don't remember why I didn't like to read about it. I'm more of a fan of the Austrian school and libertarian ideas.

Thank you for dropping by @the01crow and sharing your thoughts with us.

Is there any particular reason why you prefer Austrian school ?

Yours
Piotr

From Bloomberg

A good place to start is with a simple description that you can carry in your pocket: MMT proposes that a country with its own currency, such as the U.S., doesn’t have to worry about accumulating too much debt because it can always print more money to pay interest. So the only constraint on spending is inflation, which can break out if the public and private sectors spend too much at the same time.

In my opinion, this is not how current economy works. Countries are not closed economies, but highly dependent of international trade. Countries that accumulate too much debt not only generates inflation, but also distrust. Currency value sinks and people use other payments methods.

One of the MMT rules is that only the country can issue currency, and that is false. This theory underestimates the capacity of private banks to issue currency and manipulate interest rates. And geopolitcs is another factor that must be considered.

If a country stops taxation and issue more debt, all citizens and companies will abandon that currency and use other currency to save money and maka payments.

From what I understood The MMT theory doesnt eliminate taxes. It gives another use to it: instead of being the way to fund government expenses it is used to reduce the circulating money and reduce the inflation.

It´s doing the same but with different mechanics.

Another idea of the MMT is reduce taxes to decrease unemployment rates. For companies, salaries are just another cost, and they always try to reduce them to increase income. Reducing taxes won´t change that, so it won´t affect unemployment rates.

I really like to see how responsive you are @ropaga :)

Thank you for dropping by @phgnomo and your comment.

I just visited your profile and I've noticed that we're sharing similar passion towards blockchain. Cool :) Followed you already,

Yours,
Piotr

Thank you for your amazing comment @ropaga

I seriously wonder how MMT would deal with inflation (losing fiat currency value). After all inflation is nothing but 'hidden tax', that can destroy economy and businesses. Just like tsunami would.

Also Im curious how countries following MMT monetary system would deal financially with those who stick to traditional/current ways. Something would surely have to change.

Yours, Piotr

@crypto.piotr, I have not come across this subject before, but it sure sounds interesting. I will now go on a research to find out more and possibly make a better contribution. For sure, the current monetary system is flawed and any new system that will bring significant improvement is welcome. So that we can balance the financial ecosystem of the world.

Thank you for dropping by @focusnow and your comment :)

Hello I haven't talked to you in ages. Sorry I just started college and haven't had a lot of time to be on steem.

I'm glad to see that you're still around @teenagecrypto :)

Good luck in college,
Piotr

MMT is like taking the current system and adding even more government spending and regulation and trying to put a band-aid over everyone instead of decentralising things and allowing local economies to find their own equilibrium. It's a ploy for more control and its not going to work, it will be quicker to collapse than this fake economy we have now.

I would stay far clear of MMT but if countries do vote for it, ill be there to watch it crash and burn saying I told you so


Posted via Steemleo | A Decentralized Community for Investors

Dear @chekohler

I appreciate your valuable comment. I've noticed that you posted about negative interest rates - cool. Will read it asap.

ps.
I seriously wonder how MMT would deal with inflation (losing fiat currency value). After all inflation is nothing but 'hidden tax', that can destroy economy and businesses. Just like tsunami would.

Also Im curious how countries following MMT monetary system would deal financially with those who stick to traditional/current ways. Something would surely have to change.

Yours, Piotr

So, I didn't had much time to fully research it yet, but here is what I was able to grasp:

  • The base idea of MMT is that the government can print money, therefore it can have no debts. All government debts could be paid if enough money were printed by it.

  • In common kenesyan economic model, adopted by almost all countries is the world, the government funds to pay it's expenses/debt come from taxes. But in the MMT model, since the government expenses/debt can be paid at any time (just print more money), taxes become a tool to reduce/control inflation.

  • if I got this right, the inflation/economy growth wouldn't be directed/controlled by monetary policies, like base interest rates, but by how the taxes and money printed to pay debt are balanced.

From what I read, it seems that those who advocate this model seems to think it would be a better solution to also improve unemployment rates.

Dear @phgnomo

I fully appreciate your awersome feedback @phgnomo

Yours, Piotr

Money is everything in the modern world. So, there are economists who thinks that the governments are free to print as much money as they wish and to counter inflation and state of unemployment governments should increase taxes and issue bonds to drain excess money from the economy. It all seems to me a bullshit as printing excessive money can be fatal to any economy as it increases inflation and also creates conditions of economic failure.

Thank you for dropping by @erica005 and your comment :)

I just visited your profile and I've noticed that we're sharing similar passion towards blockchain. Cool :) Followed you already,

Yours,
Piotr

I've never heard about MMT. Finance and economic theory are not my strong suit.

I've read a bit, searching on the internet in sites for dummies, because it's really Chinese for me about MMT. But it seems to me that it's already a trend that's working? Because it says that the state and government itself can create its own money as many times as it needs to.

Our government is constantly creating more money, and look how hyperinflation is killing us.

I get the impression that it has a socialist touch too. In theory, socialism shouldn't be bad, but I guess it doesn't work in all cultures.

Thanks for sharing my friend

Stay in touch :)

Dear @jadams2k18

Thank you for always being so responsive

Cheers, Piotr

MMT good concept to talk . I am happy to learn many interesting fact about that .

Thanks for dropping by @alauddinsee

Today I was casually explaining to my high school students what the world monetary system is, trying to induce them to the definitions of cryptomonies and block chains. Here in Venezuela, in the common population, we are very far from having any notion of their meaning.

Now I arrive and see your publication amigo @ crypto.piotr, where you bring us news on the subject, it is really complicated to keep up with the pace of world economic events.

The good thing is that I have the possibility to go to your blog and see what's new on the table if I haven't received any information.

Thank you!

Dear @yonnathang

Thank you for always being so responsive

Here in Venezuela, in the common population, we are very far from having any notion of their meaning.
What do you mean?

Cheers, Piotr

Hello @crypto.piotr

I definitely saw your memo and sorry I've missed the ones in the past I'm actually a public relations personnel and I'm into pratical business and I study economics trend and behaviors especially in a place as Nigeria. MMT is something that's quite sophisticated for my field but I generally feel it's a sovereignty of government over money, it's a kind of bringing the invincible feature of money into play so only the government can benefit from. A government can't afford to go broke so as they last resort MMT becomes a solving grace when there is no other resort. So government can print money only and Only to get out of financial crises.

I'll write a Post in this. Hope you get to see it

Dear @josediccus

Thank you for always being so responsive.

I'll write a Post in this. Hope you get to see it
Perhaps you could share it with me somehow? Do you use discord or telegram? You could find me there (discord: crypto.piotr#3426)

ps.2.
I would also like to take this opportunity to share with you one of my recent posts
, where I'm describing project.hope economy (I run it with few guys from steem). I would love, if you could invest few minutes and get familiar with our efforts and perhaps share your feedback (this is what I always care the most).

Yours, Piotr

Not a fan of MMT. It's just another excuse for central planners to try to manipulate the economy and justify their control schemes. I favor the Austrian school instead.

We seem to be on the same page @jacobtothe

Thanks for sharing your view with me.
Yours, Piotr

I do think the Mosler MT900S is an amazing car, but people who want to engineer the economy like they engineer an automobile are out of their depth.

Didn't know a thing about this but definitely something that I learned about. Nice job and thanks for letting me know about this post. Votes and sharing.

Killer job interacting with people.

Thanks for dropping by @ganjafarmer and for your words of appreciation :)

Big thx also for resteeming my post

Yours
Piotr

Of course. And thank you for sharing this information.

The beginning of the related Wikipedia post describes it quite well, IMHO:

https://en.wikipedia.org/wiki/Modern_Monetary_Theory

I think US, EU, and some other countries are applying this theory already in the practice - printing so much money as they wish. Employment is on very high level. So the great danger is inflation.
(I'm holding silver, platinum, some mining stocks and cryptos...)

Modern Monetary Theory
Modern Monetary Theory or Modern Money Theory (MMT) is a heterodox macroeconomic theory that describes currency as a public monopoly for the government and unemployment as evidence that a currency monopolist is overly restricting the supply of the financial assets needed to pay taxes and satisfy savings desires. MMT is an evolution of chartalism and is sometimes referred to as neo-chartalism. Its macroeconomic policy prescriptions have been described as being a version of Abba Lerner's theory of functional finance.
MMT advocates argue that the government should use fiscal policy to achieve full employment, creating new money to fund government purchases.

Dear @deathcross

Thank you for always being so responsive.

So the great danger is inflation.

Exactly.

I seriously wonder how MMT would deal with inflation (losing fiat currency value). After all inflation is nothing but 'hidden tax', that can destroy economy and businesses. Just like tsunami would.

Also Im curious how countries following MMT monetary system would deal financially with those who stick to traditional/current ways. Something would surely have to change.

ps.2.
I would also like to take this opportunity to share with you one of my recent posts
, where I'm describing project.hope economy (I run it with few guys from steem). I would love, if you could invest few minutes and get familiar with our efforts and perhaps share your feedback (this is what I always care the most).

I'm not sure if I already did share this link with you. I hope Im not repeating myself.

Yours, Piotr

@crypto.piotr I received your message, but I do not currently have any specific articles or info on modern monetary theory. Is there something specific you are hoping to cover?

Hi @kryptoking1

Thanks for dropping by. I wanted to cover this specific topic: MMT :)

Luckily many other users had some knowledge about that issue and I've learned some valuable lessons.

Thx for dropping by,
Yours, Piotr

Unfortunately, the practices of the United States have collapsed all theories. Printing unrequited dollars has shaken the world economy deeply. It is necessary to disable Usa in order to ensure that the economic systems sit in the correct orbit.

Hi @sipahikara

It is necessary to disable Usa in order to ensure that the economic systems sit in the correct orbit.

Necessary - maybe. But is it possible? Without entire world economy going down?

thx for resteeming my post. Appreciate it.
Yours, Piotr

Regards @crypto.piotr.

The MMT suggests that the fiscal deficit must be as high as necessary to maintain full employment.
The state will always be able to increase the internal debt as many times as necessary through the issuance of bonds, since it is possible to add other factors of internal production to the mathematical formula, and thus compensate for this "supposed" deficit.
In this way, maintaining employment can achieve greater production, increase GDP and thus compensate for debt.

Many times the surpluses of any sector of the economy are taken and channeled to compensate for the deficit of some other sector and of internal indebtedness.

It should be noted that this theory only applies to the administrations of countries that own their sovereign currencies, so it is an internal procedure to increase the public debt through the issuance of bonds. For this reason, this theory could not be applied per se to business or personal finance.

Your friend, Juan

Thank you for your amazing comment @juanmolina

I seriously wonder how MMT would deal with inflation (losing fiat currency value). After all inflation is nothing but 'hidden tax', that can destroy economy and businesses. Just like tsunami would.

Also Im curious how countries following MMT monetary system would deal financially with those who stick to traditional/current ways. Something would surely have to change.

Yours
Piotr

Unfortunately, the practices of the United States have collapsed all theories. Printing unrequited dollars has shaken the world economy deeply. It is necessary to disable Usa in order to ensure that the economic systems sit in the correct orbit.

I do not know MMT (modern monetary theory),
but resteem to more people to see this.

Thank you for your resteem @cloudblade

Highly rEsteemed!

Screen Shot 2020-01-21 at 10.06.25 AM.png

MMT = Plain Chartalism

¡Watchout! sounds kinda similar to charlatanism, but it's not.

Modern Monetary Theory (MMT) is a heterodox macroeconomic framework that says monetarily sovereign countries like the U.S., U.K., Japan and Canada are not operationally constrained by revenues when it comes to federal government spending. In other words, such governments do not need taxes or borrowing for spending since they can print as much as they need and are the monopoly issuers of the currency.

For some additional wackiness, you can also click here. :)

this coudl really move forward well

@crypto.piotr, In my opinion Current Money 💵 System is really rigid because it's controlled by the Banks and no matter how much we think, at the end of the day Ownership is hold by the Banks.

I think that current picture of this world is combination and collaboration between Spiritual and Technological world. Now people are understanding the Game Of Centralisation and Game Of Fiat Money 💵. Through Blockchain Technology and Cryptocurrency Space people are trying to come out of this Cage System.

In my opinion Future is reflecting like a Hub Of Structured Decentralisation and by that i mean, before Use Cases were turning into a Market but with Blockchain and Cryptocurrency Space, Use Cases are turning into whole Economy.

But with Modern Monetary Chain we can face some issues and in my opinion most vital one is, many showcase Carelessness and Digital Money means we have to take some Precautions. For example, if we take the example of Steem Blockchain, here every Account Wallet is a bank and if people lose their Keys they lose everything in a way. No matter how much we evolve, in every time or phase we have to take those necessary precautions which are real need.

Have a wonderful time ahead and stay blessed brother.

It is interesting to have a bibliography of interesting articles about money theories. My 3 prefered references are:

Debt: The First 5000 Years
Debt: The First 5,000 Years is a book by anthropologist David Graeber published in 2011. It explores the historical relationship of debt with social institutions such as barter, marriage, friendship, slavery, law, religion, war and government; in short, much of the fabric of human life in society. It draws on the history and anthropology of a number of civilizations, large and small, from the first known records of debt from Sumer in 3500 BC until the present.

  ·  28 days ago Reveal Comment

hi @kcherukuri

Thank you for your reply and resteem.

I've noticed that your comment and most publications are downvoted. Any idea why are you being targeted?

Cheers, Piotr

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