Modern Monetary Theory

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Re: Modern Monetary Theory

Postby Elvis » Tue Nov 12, 2019 9:29 pm

Wow! This short video shows the colossal task faced by historian Nancy MacLean in going through James Buchanan's papers:

The Inspiration Behind 'Democracy in Chains'

https://www.youtube.com/watch?v=iABCRF7dhio

Idiotic viewer comments and ratio of "tumbs down" suggest a campaign to discredit MacLean. Didn't expect that.
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Re: Modern Monetary Theory

Postby Elvis » Tue Nov 12, 2019 10:49 pm

waiting supply side.jpg
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Re: Modern Monetary Theory

Postby Elvis » Thu Nov 14, 2019 5:28 pm

Epic: Bank of America Merrill Lynch (BAML) report takes MMT seriously, says that's the direction we're going. Pretty remarkable stuff for BAML; time to finally get real?.

"Bold climate action could yield a direct economic gain of $US26 trillion through to 2030 compared with business as usual."

Yes, MMT the Big Idea is fast moving from the "controversial" to "progressive" and only so long before it's "obvious." The succinct description given of MMT is refreshingly calm and accurate.

Too many graphs, sidebars, links to paste, see original Australian ABC article; lead-offs below:

Nov.13 2019
https://www.abc.net.au/news/2019-11-13/ ... 8ZtVhih0t4

The 2020s are set to be an economic turning point, says global banking giant
By business reporter Michael Janda

Updated Tue at 10:09pm

[...]
In what it describes as "the decade of peak", Bank of America Merrill Lynch (BAML) analysts say a range of economic and social challenges are "all heading to a boiling point" next decade.
[...]
It is forecasting peak globalisation, as governments seek to reassert sovereignty over trade and investment flows across borders, as already emerging through Donald Trump's trade war with China, the dispute between Korea and Japan and the rise of nationalist politicians in many countries.
[...]
"The 1981-2016 era of unchecked flow of goods, people and capital is coming to an end, catalysed by the widespread recognition that while globalisation has meant lower consumer prices, it has also meant slower growth, precarious employment and social disruption," BAML's analysts write.
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
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Re: Modern Monetary Theory

Postby stickdog99 » Thu Nov 14, 2019 11:59 pm

Elvis » 11 Nov 2019 12:57 wrote:Just saw this exchange in a blog comment section:


Austrian: "The problem with Keynesians is that they want painless solutions."

MMT'er: "The problem with Austrians is that they want painful solutions."


:lol:


That is awesome! "You will take your Aust-erity and you will like it!"
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Re: Modern Monetary Theory

Postby semper occultus » Sat Nov 23, 2019 6:40 am

only just twigged that MMT also stands for Magic Money Tree....cute
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Re: Modern Monetary Theory

Postby Elvis » Sat Nov 23, 2019 7:21 am

:idea:

MMT: "Money Measures Tradables"
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Re: Modern Monetary Theory

Postby PufPuf93 » Sat Nov 23, 2019 3:39 pm

MMT

Monkeys Make Trades :partyhat
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Re: Modern Monetary Theory

Postby DrEvil » Sat Nov 23, 2019 5:55 pm

^^You're not wrong about that. If I remember correctly traders get it right about 50% of the time. You could literally have a chimp flipping a coin and get the same result.
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Re: Modern Monetary Theory

Postby PufPuf93 » Sat Nov 23, 2019 6:39 pm

DrEvil » Sat Nov 23, 2019 2:55 pm wrote:^^You're not wrong about that. If I remember correctly traders get it right about 50% of the time. You could literally have a chimp flipping a coin and get the same result.


Perhaps MMMT?

Monkey's Machines Make Trades (as most trades are automated algorithms).

Are you of age to recall the book, A Random Walk Down Wall Street?

https://en.wikipedia.org/wiki/A_Random_ ... all_Street

https://www.amazon.com/Random-Walk-Down ... 037&sr=8-1

One assumption to the random walk theory is that between periods changes of security values follow a random walk, that is the ratio of between period market values follow a log normal distribution. The problem is, as Benoit Mandelbrot pointed out so many years ago, that between period price ratios are not random but fractal; what appears to be log normal is actually still a bell-shaped curve but one with long tails on one or both sides subject to turbulence (chaos). To the best of my knowledge that random walk is an assumption in all models valuing options and decisions regards one-sided contracts in portfolio construction by institutional investors or investment and other banks in their own accounts. But I am 20 plus years out of date so don't pay too much attention to me. :shrug:
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Re: Modern Monetary Theory

Postby Elvis » Sat Nov 23, 2019 9:57 pm

MMT is not about the stock market. By "tradables" I meant anything that can be traded for something else. Money merely measures the values of those tradable things, faciliting their exchange. It's quite a brilliant system, but a useful awareness of how it works is severely lacking. Thus progress is blocked.

I watched the House Budget Committee hearing the other day. Shocking levels of ignorance were on display. Rep. Yarmuth, the chairman of the committee responsible for setting the national agenda, explained that he's learning his job on the job:

I didn't have much economics on my way through school, so I'm using my chairmanship to become educated.


Really inspires confidence, huh?





However...that brings up a question nagging me about the stock market:

The stock market is valued at around $30,000,000,000,000.
The M2 money supply is only about $15,000,000,000,000.

(M2 includes all savings accounts, along with all other deposit accounts (but excluding Treasury bonds & bills) plus cash bills & coins in the economy.)

The question, or questions, are:

How meaningful is a stock's value, really? And especially, in aggregate?

If American stockholders all decided to sell their stocks, the money to buy it all doesn't exist. Besides, if everyone's selling, who would buy? (Perhaps "market makers"?—hm, not likely I think, not for any good price.) The stock prices would plunge.

How does this apply to, say, Jeff Bezos? If Bezos tried to liquidate all or most of his Amazon stock (i.e. sell it for dollars), the stock price would immediately begin to fall.

So is Bezos really worth $60,000,000,000?

What does all this mean in terms of the "value" of a company as measured by its stock price? Are the business assets & activities represented by the stock market really so valuable that not even all the money in the United States could purchase them? Is it mostly manipulation (e.g. stock buy-backs)?


...Just sort of winging this question, anyone with better understanding of stock trading, valuations, etc. please jump in.
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Re: Modern Monetary Theory

Postby DrEvil » Sun Nov 24, 2019 3:17 pm

PufPuf93 » Sun Nov 24, 2019 12:39 am wrote:
DrEvil » Sat Nov 23, 2019 2:55 pm wrote:^^You're not wrong about that. If I remember correctly traders get it right about 50% of the time. You could literally have a chimp flipping a coin and get the same result.


Perhaps MMMT?

Monkey's Machines Make Trades (as most trades are automated algorithms).

Are you of age to recall the book, A Random Walk Down Wall Street?

https://en.wikipedia.org/wiki/A_Random_ ... all_Street

https://www.amazon.com/Random-Walk-Down ... 037&sr=8-1

One assumption to the random walk theory is that between periods changes of security values follow a random walk, that is the ratio of between period market values follow a log normal distribution. The problem is, as Benoit Mandelbrot pointed out so many years ago, that between period price ratios are not random but fractal; what appears to be log normal is actually still a bell-shaped curve but one with long tails on one or both sides subject to turbulence (chaos). To the best of my knowledge that random walk is an assumption in all models valuing options and decisions regards one-sided contracts in portfolio construction by institutional investors or investment and other banks in their own accounts. But I am 20 plus years out of date so don't pay too much attention to me. :shrug:


Nope, I wasn't even born when the book came out, and to be honest, my eyes glaze over whenever the topic is economics. Your post might as well have been in swahili. :)

But just off the top of my head, it seems strange that it should be completely random. When you dig down it's all driven by humans or human-made algorithms, so you would expect some of our biases to show up in the numbers, but again, I have absolutely no clue on this subject (and no desire to get one, except in regards to how to burn the whole thing down).
"I only read American. I want my fantasy pure." - Dave
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Re: Modern Monetary Theory

Postby Elvis » Mon Nov 25, 2019 5:35 pm

A few squiggly lines say so much:

Image
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Re: Modern Monetary Theory

Postby Elvis » Tue Nov 26, 2019 9:57 pm

Image
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Re: Modern Monetary Theory

Postby Elvis » Tue Nov 26, 2019 10:01 pm

Image

This guy caught some flak when someone juxtaposed these Tweets.

His excuse? "That's my point: I had the freedom of choice to do it this way."
“The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.” ― Joan Robinson
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Re: Modern Monetary Theory

Postby DrEvil » Tue Nov 26, 2019 10:47 pm

^^My impression of the US healthcare system can be summed up as follows:

An American woman was visiting a friend here in Norway, and the first thing she did was fall down the steps coming off the bus and twist her ankle. She said she was fine and her friend didn't think much about it. The next day she was still limping and her friend offered to take her to the doctor, but no, she was fine, just a little sore. The next day she was still limping, and her friend told her, that's it, we're going to see the doctor, but no, she was fine and it would get better.

Her friend kept insisting because she was obviously not fine, and in the end she practically had to force her to go to the doctor. When they got there he immediately saw that it was broken and set about fixing it, but the woman was practically in hysterics, so they asked what was wrong. Turned out she knew her leg was broken, but she didn't have travel insurance and was so terrified of the medical bill that she would rather walk around on a broken leg for another week and get her US insurance to cover it when she got home. When they finally managed to convince her that she wouldn't have to pay a dime she was so relieved she started crying.
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