Mike Norman Economics

Modern Monetary Theory (MMT) is an alternative economic framework that challenges the conservative neo-liberal narrative of ‘free trade’ and ‘competition’ which has held sway for many decades as the way to global prosperity. In simple terms, MMT makes us see that money is completely a creation of the State, and hence, a sovereign government does not need our money (either through taxes or borrowing) in the first place to strategically spend it, that is, without causing inflation. And that...

Recent discussions about bank runs in economics has led me to the conclusion that economists want to lump practically all behaviour around default as a “run,” which is not helpful. In order to have a better grasp of the situation, we need to distinguish various possibilities — runs, cascades, squeezes, and good old fashioned financial crises.…Some useful definitions.Bond Economics Runs, Cascades, Squeezes, and CrisesBrian Romanchuk

This another way to look at it… Fed is transferring more USD balances to non-govt than Treasury would if the Fed owned zero assets… ~10B in accumulated operating losses. Will find out the last weeks amount of losses in about an hour. Lost $4B last week. pic.twitter.com/CdElJiNfqh— Nothing (@whip_n_spur) October 20, 2022 Somewhat of a non Congress approved fiscal transfer…where are these transfers going?  To IOR and RRP… IOR going to Depositories as additional accrued Capital and RRP interest...

European industries are struggling to stay competitive amid soaring energy costs.Surging natural gas and electricity costs have resulted in a jump in operational costs for all industries, from steelmaking and car manufacturing to textiles and clothing.Europe’s industry associations cautiously welcome the various EU proposals, but urge Brussels to take further actionGerman industry is not competitive without inexpensive energy piped in from Russia based on longterm contracts rather than spot...

Philly Fed president Patrick Harker may help implement monetary policy, but certainly doesn't understand it. Trade and invest using the concepts of MMT. Get a 30-day free trial to MMT Trader. https://www.pitbulleconomics.com/ Mike Norman Twitter https://twitter.com/mikenorman Mike Norman Economics: https://mikenormaneconomics.blogspot.com/ Understanding the Daily Treasury Statement video course....

Xi Jinping just offered the Global South a stark alternative to decades of western diktats, war, and economic duress. 'Peaceful modernization' will establish sovereignty, economy, and independence for the world's struggling states...The Cradle‘Peaceful modernization’: China’s offering to the Global SouthPepe Escobar

The world is bifurcating into the US-led system and others. This is simultaneously leading to a split in world trade including settlement, which is the foundation of the global economy. In this sense, multipolarity is already here and the question is whether the US can reverse it.BTW, economic geography is a key aspect of economics. (It is Paul Krugman's side interest.) Economic geography is foundational to the world system.The world system is primarily an information system, which in modern...

Important! Decoupling seriously on.Implications for global trade and world economy uncertain, i.e., has the US thought this through systematically. Judging by the sanctions "war" to date, probably not. Anyway, thinking through changes and likely consequences in a huge complex adaptive system like the world system  is difficult to impossible. All that can be said  at this point is that there will be surprises. This is a huge escalation. One thing can be said with assurance about the Biden...

Seems to be some confusion out there so here you can see in this Government Money Market Mutual fund prospectus that the Fed has created a new govt obligation for USD savers to save in… They have $20b (fund’s largest holding) in a RRP with the FRBNY at the 3.05% RRP rate: This is going to go up towards 4% in two weeks then towards 5% in December… 🤑🧟‍♂️🤑🧟‍♂️This RRP asset has been created as an alternative to a depository account at a system Depository Institution for USD savers because those...

China and Japan have been reducing their holdings, but other countries are stepping up and adding to their holdings. Trade and invest using the concepts of MMT. Get a 30-day free trial to MMT Trader. https://www.pitbulleconomics.com/ Mike Norman Twitter https://twitter.com/mikenorman Major Foreign Holders of Treasury Securitie https://ticdata.treasury.gov/Publish/mfh.txt Mike Norman Economics: https://mikenormaneconomics.blogspot.com/ Understanding the Daily Treasury Statement video...