Many electrons have been inconvenienced over this topic, and most have been in vain. I’ve wondered all week whether I had anything meaningful to add. However, a few points that have emerged in discussions are worth highlighting….New WaylandThe Accursed Tariffs NeilW

So imminently employers of  millions of illegals are gonna be submitting their FICA tax reports containing those now DOGE deleted 9M SSNs and IRS is gonna immediately flip that information over to ICE for immigration raids probably to the largest offenders first…Could be a mass firing event which probably won’t show up in UE claims because the current employees are illegal… maybe job openings will spike up … while UE rate appears constant…So Art degree Fed morons will interpret that as “inflationary!” and will be EVEN LESS inclined to reduce the policy rate for Trump…I’m more worried about this whole thing than the whole “tariff!” BS…You may want to load up on some frozen chicken beef or pork products this week just in case..IRS has agreed to share migrants’ tax information with ICE, to

I am a bit late with this. I have been jammed this week and just got to. It’s an explanation of the Trump tariffs. It’s the brain child of Stephen Miran, chair of the Council of Economic Advisors. Miran lays it out in  A User’s Guide to Restructuring the Global Trading System. Simplicius summarizes it briefly.Bill Mitchell deals with this from the MMT point of view in today’s post, which I linked to earlier.Simplicius the ThinkerTrump’s "Liberation Day": Another PR Gag, or Global Reorientation Turning Point?Simplicius

Last week, the US President honoured his election promise, indeed his long-held commitment, to increase tariffs on imported goods and services to the US. The formula they came up to differentiate between countries was bizarre but I don’t intend commenting on that here, except to say, the imposition of tariffs on the – Heard Island and McDonald Islands – which are an ‘Australian external territory’ that is a ‘a volcanic group of mostly barren Antarctic islands, about two-thirds of the way from Madagascar to Antarctica’ (where penguins live) ranked up there with their Signal chaos. These guys have access to the ‘red button’ after all. That’s the scary thing. Anyway I was sent a document that seemingly is the theoretical rationalisation for the tariff decision (thanks Mahaish, appreciated)

A recent UnHerd article warns of a “crypto time bomb,” suggesting that stablecoins could become a geopolitical tool to undermine the U.S. economy by redirecting foreign dollar reserves into U.S. Treasuries. The core assumption is that countries like Japan are sitting on idle piles of dollars, waiting for a stablecoin intermediary to put them to use.This misreads how international finance operates. Like other major dollar holders, Japan doesn’t need help managing reserves. Dollars earned from trade surpluses are immediately reinvested, often into U.S. Treasuries. There are no dormant pools of dollars needing a middleman. The real action lies not in crypto or stablecoins but in how governments use their currency-issuing powers to actively manage currencies and reserves.The Real Mechanism:

If these numbers represent illegal alien people currently working using other dead peoples ID numbers, when the payroll taxes are paid this week and 7M fraud notices go out to the employers it could turn out Elon actually threw 7 million people out of their jobs this week … it could create a mass firing event of 7 million people who are currently working (albeit illegally but nevertheless) in the economy, …. causing a collapse in output and a collapse in tax receipts going forward…Mike will immediately see the corresponding drop in YoY tax receipts in his reporting data if this is what is really happening… we have to wait and shortly see if this is the real effect is of this policy…If so, the benefit to Trump politically might come when they rerun the SS actuarial numbers without the

For the record. From an Austrian economist.AbstractThis paper analyzes the debt monetization proposals of Modern Monetary Theory from an Austrian structure of production perspective. It shows that this policy raises societal time preferences and reduces the number of higher order stages in the economy, leading to a higher interest rate, lower economic growth, and increased prices of consumer goods. In order to demonstrate this, it goes back to the basics and investigates the nature of government spending and how it differs from investment. I argue that Murray Rothbard, a staunch critic of Keynesian economics who would have also fiercely opposed MMT had he lived to see its rise, was correct to classify government expenditures as unproductive consumption that detract from genuine

Pass it on.MMT101.ORG – Learn Modern Monetary Theory (MMT)An Explanation Of Why Taxes Don’t Fund Spending—And Why Elon Musk Is Wrong About The US Government DeficitJim Byrne – MMT101.ORG

TGA down at 450b area now … So let’s assume they keep screwing around and eventually bottom it out at 50b leaving the current threat at 400b reserves in TGA that could be forced upon the banking system … To cover that 400b, banks would need at least 1/10th of that in capital for SLR of 0.1 … (might be a bit less) but we’ll be conservative … 1/10th is 40b… so eg if banks were given 40b of additional free capital right now,  then they could cover those additional 400b reserve assets without effecting any other asset levels/prices at the banks…IOR is providing additional free capital to the banks every month…H.4.1 this week has reserves now up at >3.4T and IOR is 4.40% so that is approx 12b per month of capital flowing to banks every month …

40b/12b per month = 3.333 months so in a bit

It’s been over ten years since the Bank of England published Money creation in the modern economy, yet despite that, I run into people daily parroting untruths about how banking works. As part of the update to the UK Accounting Model, we will enhance the banking chapter to cover how lending institutions work and highlight some of the intriguing artefacts that a proper understanding reveals….New WaylandThe Loan Lock ParadoxNeilW

Musk’s “AI” can’t apply regulatory math (maybe THIS is where he gets it?):The graph shows the Treasury General Account (TGA) balance dropping sharply recently, hitting its lowest since COVID. This $170B cash injection over 3 days signals the U.S. Treasury exhausting debt ceiling measures, pumping liquidity into the economy. Risk assets like stocks may…— Grok (@grok) March 8, 2025 This is funny from it: “Risk assets like stocks may get a short-term boost…” LOL stocks are in a free fall!  Grok: “down is the new up!”…How does a constant proportional (simply numerator divided by denominator) financial leverage system get a risk price increase when non-risk is being added?  It’s 8th grade Algebra… grok can’t apply it…I think grok is based on language so it’s apparently susceptible to the same

It’s finally March 2025, and I can hardly believe that a date I’ve had in the diary for such a long time has finally arrived. It means, at long last, I can call time on a 30-year contracting career and retire from full-time work….Congratulations on your retirement. Looking forward to your new focus on MMT research.New WaylandTime for a ChangeNeilW

LOL … yo risk prices went DOWN you fcking idiots… it caused a sell off… forcibly adding non-risk to same system balance sheet causes risk prices to REDUCE… Here comes the flood: Treasury injects avalanche of cash into the economy ($170BN in 3 days, the most since covid) as debt ceilling extraordinary measures are exhausted; Should prop up risk pic.twitter.com/N3sDuQG70w— zerohedge (@zerohedge) March 2, 2025

This primer outlines why the Zero Interest Rate Policy (ZIRP) is the most effective and equitable approach for the UK economy. It explains why interest rates should be permanently set to zero, how banking reform can create a more stable and fair financial system, and why clear, enforceable, and accountable loan regulation is essential for long-term prosperity.New WaylandZero Interest Rate Policy (ZIRP) PrimerNeilW

“…whenever I am studying European data I think how stupid the European Monetary Union (EMU) is from a modern monetary theory (MMT) perspective.“ MMT Economist Bill MitchellMMT101.ORG – Learn Modern Monetary Theory (MMT)The Introduction of the Euro – A Catalyst for Eurozone Economic Decline?The Effects of the Euro: An Analysis from a Modern Monetary Theory (MMT) Perspective.Jim Byrne – MMT101.ORG

Good short explanation of MMT by an educator. (10 min. read)Pass it on.EducationYou Know Nothing About Economics—But there is no shame in thatThomas Swan

This working paper integrates the credit money approach (associated with Post Keynesian endogenous money theory) with the state money approach (associated with Modern Money Theory) by drawing on Wray’s 1990 book (Money and Credit in Capitalist Economies: The Endogenous Money Approach, Edward Elgar), his 1998 book (Understanding Modern Money: the Key to Full Employment and Price Stability, Edward Elgar), and his 2004 edited book (Credit and State Theories of Money: The Contributions of A. Mitchell Innes, Edward Elgar). New sources and interpretation of the history of money make it clear that there is no contradiction between state money and private credit money—each played a role in the creation of the modern monetary system. Indeed, today’s system was created by bringing state money into

Today (February 13, 2025), MMTed releases Episode 11 in the Second Season of our Manga series – The Smith Family and their Adventures with Money. Have a bit of fun with it while learning Modern Monetary Theory (MMT) and circulate it to those who you think will benefit….William Mitchell — Modern Monetary TheoryEpisode 11 (S2) of the Smith Family Manga is now available – intergenerational tensions arise within the Smith householdBill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Mike with epic rant against the DOGE propaganda .. instant classic![embedded content]

Rename "debt" and "deficit" to reflect reality.The LensTrump’s Executive Order to Rename Debt and DeficitsStephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats’ chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders

This is 100% pure BS…. They surely want the Fed to lower the rates… don’t believe it…Bloomberg: Treasury Secretary Scott Bessent says he and Trump are focusing on 10-year Treasury yields—not Fed policyhttps://t.co/rIUuEBHUAK pic.twitter.com/quBnoYdwsg— Lance Lambert (@NewsLambert) February 6, 2025

It was 2020, and Trump was responding to a question about a $6.2
trillion fiscal package (emergency COVID spending plus day-to-day
operations). The reporter might have been confused about where the money
was coming from, but Trump wasn’t. “The beautiful thing about our
country is…we can handle that easily because of who we are—what we
are—it’s our money…it’s our currency,” he explained.…Understanding what it means to issue a sovereign currency is at the core of Modern Monetary Theory (MMT). If you’re new to MMT, click this link
and watch Professor L. Randall Wray explain. The bottom line is that a
currency-issuing government, like the United States, never has to worry
about “finding the money.” As Wray explains, the money gets spent into existence when Congress authorizes a budget

Politicians on both sides of the Atlantic are once again talking about rolling back banking regulations to kick-start growth. This article is a timely reminder of why those regulations exist.MMT101.ORG – Learn Modern Monetary Theory (MMT)Your 4-Step Guide to Understanding the 2008 Financial Crash & Subsequent Recession — From a Modern Monetary Theory (MMT) PerspectiveJim Byrne | MMT Scotland

Where was this play in the Art degree Keynesian free market fundamentalism playbook?  I thought the Canada people were just supposed to add the tariff onto the price of the products?  Instead they are removing the products from inventories… going to create a glut of these products in the US and US prices are going to fall to get rid of it … no “inflation!”… ?Canada’s biggest province said it will remove American products from its government-run liquor stores as part of its response to President Donald Trump’s 25% tariffs on Canadian imports https://t.co/a2sCx4ajuE— Bloomberg Economics (@economics) February 2, 2025

LOL … then according to Art degree monetarists they should reduce the rate to figure of speech  “counter the headwinds!”.. which is what Trump wants them to do in the first place… We read the transcripts of the Fed’s 2019 meetings so you don’t have to, and here’s the main takeaway: The headwinds they felt from Trump’s tariffs were strong https://t.co/57LOVFGjbn— Bloomberg Economics (@economics) February 2, 2025

Looks like DOGE/Elon trying to reduce top line by $1T by September… US GDP $27T/yr…. So no multiple that’s a direct 3.7% … I guess they think they’re only reducing govt spending on unnecessary regulatory activities or something… climate nutter stuff etc… maybe the “Argentina model”… ?Reducing the federal deficit from $2T to $1T in FY2026 requires cutting an average of ~$4B/day in projected 2026 spending from now to Sept 30. That would still result in a ~$1T deficit, but economic growth should be able to match that number, which would mean no inflation in…— Elon Musk (@elonmusk) January 31, 2025 He seems to understand the Art degree figure of speech “money!” as rather a scientific abstraction:The real economy is not money, it is goods & services. Money is simply an abstract representation

Today, we solve the ‘Case of the Missing Report’. Recall from – The Case of the Missing Report – Part 1 – that the Asian Development Bank published a report I had written (with Randy Wray and Jesus Felipe) – A Reinterpretation of Pakistan’s ‘economic crisis’ and options for policymakers (draft version) – in June 2009 as part of work I was undertaking for the Bank at the time on economic development in Central Asia. The report was published on June 1, 2009 as an official ADB Economics Working Paper No. 163 after our presentations were enthusiastically received at the Bank during seminars we gave. The Report was indexed by the major bibliographic and indexing services and evidence of that report still exists today. For example, the Asian Regional Integration Center provides a link to some

Art degree morons as usual can’t understand the Accounting abstractions… think NVDA has to be shipping the REAL units to where the Accounting ABSTRACTIONS are recorded…Like I guess they think we’re importing $300B net of Guinness, Jameson and potatoes from Ireland…It’s the same as the current Trump “tariffs!” womanish soap opera… A LOT of people are going to get that wrong for the same reasons…Looks like $NVDA GPUs have never been physically in Singapore ⚠️So, according to $NVDA 10-Q disclosures “For example, most of the shipments associated with Singapore revenue went to either the United States or Taiwan in the first quarter of fiscal year 2025.”Guess what..… https://t.co/n0Wr9IEz8M pic.twitter.com/plgg6ZdA7K— JustDario ?‍♂️ (@DarioCpx) June 29, 2024

This blog post is a long time in gestation and I could have written in 2009 which is the relevant year of the events that I will document in this two-part series. My conversations with government officials during my working trip to the Philippines last week highlighted several things, including their sheer terror of IMF intervention and the ratings agency. I will write separately about that in a later post. But the IMF watches these types of nations like a hawk and is ready to pounce to enforce their authority at the slightest departure from the neoliberal macroeconomic policy line. As long as these types of nations concede to the IMF bullying they have very little hope of developing towards being advanced states. And IMF bullying is what this blog post is about. This is Part 1 of a

Stephanie asks Deepseek.The LensThe Impact of 25% Tariffs on Canadian GDP—The Bank of Canada vs DeepseekStephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats’ chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders