Modern Moister Theory

One thing Bitcoin and crypto crazies cherish is the thought central banks will go poof. This is something the rad left is also embracing. And, yes, the moisters seem to be lining up behind a new economic model for the world – one where wealth inequality is replaced by a sharing utopia.

What does this mean?

Well, for ages now we’d had a form of Keynesian economics in place (relax – I will make this simple). Good old Mr. Keynes postulated that when times suck (like 2008) governments should amp spending, plus central banks should stimulate the economy by crashing interest rates and increasing demand. Cheap mortgages, for example. They make people want to buy houses, which puts drywallers and realtors to work.

The downside is we become hooked on cheap money and pickled in debt, so raising rates again is hard. Also when things get better inflation jumps and everything costs more than it should. Meanwhile governments raise taxes to try and contain the runaway spending caused by increased social benefits (like unemployment payments) and bailing out car companies.

In good times, conversely, Keynes said interest rates should rise to contain demand and cool things off – keeping inflation under wraps and the value of money stable.

This is the way it’s been for the whole time you’ve been alive. It’s worked okay. But a byproduct has been a bigger wealth gap and that ever larger mountain of debt. Middle-class families bought into Keynesian economies bigly by borrowing to the max to afford houses which the same policy inflated in price. More debt means less savings. The gap grows. So does resentment, and the feeling there must be something better. When moisters can’t afford houses the way their parents did, the appetite for change grows insatiable.

And here it is. MMT.

Modern Monetary Theory isn’t new – been around for decades. But now it’s hotter than that Shar-Pei bitch down the road that Bandit fancies (he’s delusional). The princess of MMT is AOC, the new US politician (Alexandria Oacasio-Cortez) who is the nemesis and hate-object of the Trump deplorables. Her “Green New Deal” is based on an economic system which can provide full employment, give everyone a guaranteed income, free education and health care plus solve the climate crisis. All this in a country with $22.2 trillion in national debt and a budget deficit which this year will hit $1 trillion.

AOC may well be a fruitloop and the thing-du-jour, but MMT is sure turning into a big topic. Just this week billionaire hedge fund dude Ray Dalio claimed it’s “inevitable” this way of thinking will replace the central bank monetary policy that’s shaped our lives. The basic premise is that governments dump central banks and print all the money they need to do whatever the majority of people desire. That would include financing public programs (like health care), buying real estate that’s then converted into housing (the moisters’ Holy Grail), eradicating public debt and, during recessions, just sending people cash.

The big threats are (a) all this could be wildly inflationary as the supply of money expands and becomes worthless, destroying private savings and (b) capricious elected politicians like AOC, not crusty, cautious central banks, would be in control. The MMTers’ solution to a soaring cost of living is to jack up taxes, thereby putting a chill on economic activity.

For these reasons traditional economists are having a minor cow. MMT decouples spending from taxing. It eliminates all this fussing about debt, deficits and revenues. Since governments print their own money, it means there’s an endless supply. No reason not to rebuild infrastructure, give everyone a guaranteed income, create jobs and provide lifelong services. Interest rates would be irrelevant since money and goods would be freely available as dictated by government policy and public demand.

Of course, caught in this orgy of printing and spending would be private enterprise and savings. With the government providing so much more, competition for goods and services would increase. So would corporate costs, and prices, begetting higher taxes to maintain equilibrium. As for savings and investments, they’d be hollowed out a little more every time the digital printing presses fired up and the money supply increased. After all, the more money that circulates in a society, the less your pile is worth. And that is exactly how the MMTers deal with the wealth gap. Everyone gets a basic amount, and the rich are dissipated.

If this sounds a little like, you know, commies talking… you get it. MMT is a blend of state socialism, Keynesian extremism, political opportunism and a fair amount of weed. Establishment economists like Paul Krugman, himself judged a lefty by the Trumpians, see it as fantasy. Others are shocked that elected politicians – answerable to a public always wanting more for less – would be given the levers of the money supply with no system of checks and balances. The outcome, they warn, could be epic. And, worse, unknown.

But that hasn’t kept AOC from being a social media and political rockstar. It hasn’t slowed the Millennial pushback against The Man. The yellow vests are still subsuming France. Brexit is calving the UK. Bernie Sanders is still kicking. Trump’s still dissing the Fed. Millions of people seek political and economic options to a system they think has failed modern expectations. Look at BC. When people can’t afford houses, they’ll do the damnedest things on election day.

That’s worth remembering.

169 comments ↓

#1 APF on 05.02.19 at 4:29 pm

MMT is actually the school of economics most concerns with controlling inflation :

From Stepĥanie Kelton: It all depends how close the private sector comes to delivering full employment on its own. In any case, the government should focus on inflation and not worry about deficits or debt, per se.

Inflation would be the only economic indicator worth looking at in a MMT world.

I’m not saying that we should go on MMT right now, there is a lot of research to be done about that. But saying that MMT will lead to inflation is a complete misinterpretation of the theory.

https://www.bloomberg.com/opinion/articles/2019-02-21/modern-monetary-theory-is-not-a-recipe-for-doom

Careful. It’s just a theory so far. Uninhibited spending is always inflationary. – Garth

#2 Shawn Severin on 05.02.19 at 4:32 pm

I’m the meantime USD is going to rip higher as commodities fall and the FED holds (or maybe cuts) because inflation is falling.

#3 Hawk on 05.02.19 at 4:36 pm

MMT = Venezuela in 5 years time!

#4 APF on 05.02.19 at 4:41 pm

During the great recession, the balance sheet of the central banks increased by many multiple, and yet inflation was only around the target of the central bank.

Depending on the economic circumstance, unhibited spending is not always inflationnary.

But I do agree on the fact it is a theory and we need to be careful. For one, our political system isn’t built for that…

#5 The Wet One on 05.02.19 at 4:42 pm

Not that I in any way support MMT (or even know anything about it), but apparently the current system ain’t working too well for a lot of folks.

If one expects that alternatives won’t arise and be entertained under those circumstances, well, they have their head stuck where the sun don’t shine.

That’s not the way the world works. Not anymore anyways. Back in Middle Ages maybe when the Church and it’s beliefs reigned supreme.

Nowadays?

Eh, not so much.

#6 Graeme on 05.02.19 at 4:48 pm

Buying at least some gold makes a little more sense every day as of late.

#7 Mean Gene on 05.02.19 at 4:56 pm

I think everyone needs to watch Doctor Zhivago, to get an idea what can happen when the people pull down the elite and try to implement their version of a idealistic country.

There was that scene where Yuri returns to his house in Moscow with the family and discovers the Soviet Government has turned it into a tenement, basically everyone has a place to live but it is a shithole (crummy). But hey, everyone is equal.

Beware what you wish for as the old saying goes.

#8 not 1st on 05.02.19 at 4:58 pm

Trump is the only person standing in the way of true dystopia.

#9 Mike on 05.02.19 at 4:58 pm

So, Garth –

What is safest hedge for upper middle working class to survive MMT. except living in bunker or running north, etc types….

Like buy home, if renting? because home values will inflate as printed money roam around…or….buy gold :)

#10 But in BC on 05.02.19 at 5:03 pm

Christie HAD to go. That’s how Horgan got in.

#11 Alistair McLaughlin on 05.02.19 at 5:04 pm

For those who would dismiss it, MMT went from a single textbook in 1998 to near gospel for a committed and growing cult in 20 years. I don’t think even Christianity took off that fast.

We can thank Bernanke for this. He printed trillions to reflate asset markets. So of course the lefties would come along and say “Well, if he can print money for millionaires, we can print money for everyone.” One can hardly blame them.

They neglect the fact that while printing money for millionaires inflates assets, printing money for everyone inflates everything. But don’t worry, they’ll control inflation by increasing taxes.

#12 binky barnes on 05.02.19 at 5:07 pm

Who will do the work?

#13 Guy in Calgary on 05.02.19 at 5:08 pm

Interesting post and eloquently explained. Thank you.

So long as humans remain corruptible, the new proposed system will never work in practice. It really is as simple as that.

#14 NoName on 05.02.19 at 5:16 pm

I already posted little girl macking AOC we all expired in 12 yrs, so i skip that, but this dance on a roof top actually i like it.

https://www.youtube.com/watch?v=sMjcMG5Ed3o

#15 SunShowers on 05.02.19 at 5:17 pm

#7 Mean Gene on 05.02.19 at 4:56 pm
I think everyone needs to watch Doctor Zhivago, to get an idea what can happen when the people pull down the elite and try to implement their version of a idealistic country.

There was that scene where Yuri returns to his house in Moscow with the family and discovers the Soviet Government has turned it into a tenement, basically everyone has a place to live but it is a shithole (crummy). But hey, everyone is equal.

———————————————————–

Socialism means having to give up control of your private property to other people! Things like your car and your home would have to be shared with others! Thank goodness that doesn’t happen under capitalism!

Now if you’ll excuse me, I need to finish my Uber shift before my AirBNB guest arrives.

#16 Dave on 05.02.19 at 5:17 pm

The gas price at the pump in Vancouver changes every few hours. 1.71 in day time with several cents drop at night. Massive lineups around the corner to fuel up after dark.
The folks at Standard Oil are training the masses on how to lineup for essential services.
Everything in our lives is controlled by monopoly. The elite just change the names so every thing looks like free market enterprise.

#17 Joe on 05.02.19 at 5:22 pm

-Shopify – talk about a rocket

-Warren Buffet speaking on yahoo finance sat 9:45 start
-he is already pitching Vanguard index 500 ETF…VOO
-drop your money in and no more decisions

#18 Yukon Elvis on 05.02.19 at 5:24 pm

The have nots can out vote the haves. It is all over but the crying.

#19 Leftover on 05.02.19 at 5:25 pm

MMT variants have been around for decades – Argentina, Zimbabwe, most recently Venezuela.

Notwithstanding that all required leaders who were, um, dictators, in every case national living standards rapidly plummeted to unimaginable levels.

If the objective is to achieve equality through widespread poverty, then MMT is a sure bet.

The road to serfdom indeed.

#20 yvr_lurker on 05.02.19 at 5:34 pm

Alexandria Oacasio-Cortez makes Bernie and Noam Chomsky look right-wing. The latter two seem mainstream in comparison, and Noam’s movie Requiem for the American Dream was much more spot on in my view. Alexandria lives in fantasy land; what she advocates will never happen. They could not even prosecute one single wall street exec for the 2008 debacle; how are these same people going to step aside of their hedge funds etc.. to push for MMT. I don’t see it.

However, your association of the MMT movement and the new controls put into BC is frankly laughable. By finding the most extreme viewpoints out there in the U.S. and then stringing together sentences to lead to the provincial BC-NDP does not mean this “connection” has any merit. Ask yourself these simple questions:
1. why did housing become so inaffordable for the LOCALS in YVR and GTA as compared to other cities in Canada. (no need to answer this one as I will be called xenophobic… New Zealand seems to have a good plan in my view)
2. Why are there groups of people who have been disenfranchised by globalization and off-sourcing of jobs?
3. Should the Gov’t just have let the international global market and the global elite set the margins and speculate on real estate in our major cities.
4. Should the Gov’t turn a willful blind-eye to rampant money launding, tax cheaters, etc….(answer: no)

By coming up for some measures to address 1–4, I don’t see that the mainstream hordes are going to be embracing MMT and calling for the guillotine.

#21 Dolce Vita on 05.02.19 at 5:36 pm

AOC.

“The Little Red Hen” that went Red.

Once the economic disparity pendulum is rebalanced, as happens under Populism, AOC will end up a short epitaph for the period.

Ray Dalio, whom I like very much, forgot about the The Little Red Hen story and his own Populism Chart:

https://i.imgur.com/VkGeTS3.jpg

Typical of Humanity.

When it goes wrong, swing the pendulum from 0° to 180° and back again when all is well.

Where instead, somewhere in the middle lay the truth.

#22 Doug t on 05.02.19 at 5:37 pm

When this plays out (and it will sadly) there will be less and less reasons to invest – less reasons to be an entrepreneur – less reasons to try for a higher education and on and on

#23 Kebo on 05.02.19 at 5:40 pm

To me, the solution to the growing wealth divide is to increase estate taxes and lower income taxes. Why punish hard work and enterprise by taxing income?

Instead tax wealth after death. Maybe make the first 10 million tax free so you can look after dependents and then start progressively increasing. If you’re net worth is 1 billion at death, why not give up 400 million for your country when you die? And offset the gains in estate taxes with reductions in income taxes.

#24 Catalyst on 05.02.19 at 5:49 pm

Let’s be honest, we haven’t had Keynesian economics either. Deficits have been run up at the government level by under taxing private individuals (the natural outcome of democracy voting for lower taxes). In the US, not even the Republicans care about debts anymore. It’s about the economy stupid and if theh can spend into oblivion to prop up GDP for the next 2 years, they will.

In Canada, it’s slightly different. We have high taxes but too many subsidies and social programs. I actually think this is more supportive of democracy long run but in a global economy it’s made us structurally uncompetitive in business.

It’s tough to k ow what to do with investments. If this deficit spending in the US is allowed to run unchecked, then US is the place to be. If not, the USD is highly overvalued given debt levels and no plan to a balanced budget. It is the great mistake of our time letting one nation (the US) control the world’s reserve currency. It allows them to have too great an advantage in a global competition.

#25 Dolce Vita on 05.02.19 at 5:54 pm

The health of the Canadian Consumer is weighing huge on my mind, considering 60% or so of GDP depends on that source of spending.

The ANNUALIZED GDP growth rate for the past 6 months is:

+0.39%

“Retail Trade Sales”, UNADJUSTED or Raw data, Sept. 2018 → Feb. 2019:

Retail trade, OVERALL
-21.6% (Seasonally Adjusted = -0.9%)

Motor vehicle and parts dealers
-24.1%
Furniture and home furnishings stores
-25.2%
Electronics and appliance stores
-30.0%
Building material and garden equipment and supplies dealers
-38.0%
Food and beverage stores
-14.1%
Health and personal care stores
-6.0%
Gasoline stations
-21.6%
Clothing and clothing accessories stores
-33.3%
Sporting goods, hobby, book and music stores
-36.0%
General merchandise stores
-19.0%
Miscellaneous store retailers
-21.6%
Retail trade
-21.6%
Motor vehicle and parts dealers
-24.1%

https://www150.statcan.gc.ca/t1/tbl1/en/cv.action?pid=2010000801

————————————————————-

Pray for slow growth.

#26 Buy Low Sell High on 05.02.19 at 5:55 pm

Alexandria Occasional Cortex, I want to go to Harvard for free!

#27 Hawk on 05.02.19 at 5:56 pm

#19 Leftover on 05.02.19 at 5:25 pm

Agreed and well said, except that people are not even equal in that poverty. That is the greatest lie of all socialists / communists.

Castro, Chavez & fat boy did mot and do not remotely participate (endure) the “equality” they impose on their fellow citizenry!!!!

#28 Leo Trollstoy on 05.02.19 at 6:00 pm

#9 Mike on 05.02.19 at 4:58 pm
So, Garth –

What is safest hedge for upper middle working class to survive MMT.

Illiquid cash flow generating assets that track inflation

#29 old dinosaur on 05.02.19 at 6:02 pm

Canada got MMT 3 years ago when they voted in SOCKS.
30 billion a year printed with nary a glance at the balance sheet.

In fact people were warned before they elected him when he so eloquently said

“The Budget will balance itself”

But you cared not though when you voted for him ( and many here did) You just wanted nice hair and socialism.

The great news is this. Canadians will get the drab gray tenements filled with dirty-clothed equal paid comrades it so richly deserves.

The failure of global and Canadian oligarchic socialism is causing this type of lunacy to become mainstream.

The system has broken, the deficits unending, the debt exploding with no hope of paying it back and the creation of another oligarchy program is needed.

You have MMT now you just don’t know it.

They are trying to change US economics – not ours.
The USA was the last vestige of capitalism and now that the oligarchs like Dalio have left the building with billions – they say rip it down.

How convenient

#30 Tristan on 05.02.19 at 6:15 pm

Hi Garth, when you call a woman a ‘fruitloop’ on your blog, what does that mean exactly?

Same as when I call a man a fruit loop. – Garth

#31 espressobob on 05.02.19 at 6:18 pm

There was a time in the early 19th century when aluminum was more valuable than gold.

It’s ironic what people consider a store of wealth.

#32 Spia on 05.02.19 at 6:20 pm

We should all read a little more history… The yellow jacket movement and the MMT thinking is similar to the Assignats monetary system in France in the 18th century. What started as 400 million livres grew to 45 billion in the space of 6 years. The mob destroyed the money printing presses in Place Vendome. We are going down the same path but exponentially with electronic digits. Who do we string up? The bankers? We will not even have the satisfaction of feeling the heat of burning all that money. Maybe develop an app… Sound money needs to be backed by something of value. Not necessarily gold, but stuff that can be traded… Metals, Widgets, Food, Water… 110010 is not valuable.

#33 Joseph R. on 05.02.19 at 6:24 pm

#11 Alistair McLaughlin on 05.02.19 at 5:04 pm

Bernanke didn’t use MMT to justified Quantitative Easing. Instead, he, like all Central Banks, used Philip’s curve to shape their monetary policies.

“The modern Phillips curve tells us that inflation is guided by three forces: expected inflation, the deviation of unemployment from its natural rate (sometimes referred to as the unemployment gap), and supply shocks.”

Unemployment is a worse problem than inflation, as such the FED should aim for the natural rate of unemployment, and then increase interest rates to slow down inflation due to supply shocks.

Raising/lowering taxes is fiscal policy, not monetary policy. The FED or BoC has nothing to do with it.

To learn more on Philip’s Curve influence on monetary policies:

https://www.frbsf.org/education/publications/doctor-econ/2008/march/phillips-curve-inflation/

#34 Reximus on 05.02.19 at 6:27 pm

for this concept to work you need full control and ready supply of your societal needs I. e food and energy and raw materials to dictate prices and distribution of those limited products to control inflation…you can print all the cash you want, but any inevitable scarcity of necessities…well watch out

IOW soviet style economic model. ..can’t remember if that worked or not

#35 Pfft on 05.02.19 at 6:31 pm

@#29 old dinosaur on 05.02.19 at 6:02 pm
Canada got MMT 3 years ago when they voted in SOCKS.
30 billion a year printed with nary a glance at the balance sheet.

In fact people were warned before they elected him when he so eloquently said

“The Budget will balance itself”

______________________________________

if you’re going to use that quote at least use all of it for context.

#36 Spia on 05.02.19 at 6:31 pm

We can learn a lot from the French.

https://fee.org/media/5177/july-aug-07-from-the-president.pdf

Eerily familiar…

#37 Linda on 05.02.19 at 6:32 pm

I may have to find & read a copy of the Decline & Fall of the Roman Empire. As I recall from history texts some of the primary causes leading to ‘the end’ were 1) a very high percentage of the population were on the dole; 2) the currency had become debased so that it took more to purchase less; 3) it cost more for government to provide goods & services than they were receiving in tax revenues. In effect, bread (the dole) & circuses (entertainment) were provided to keep the citizens from rioting (they still did). Throw in a few robust plague events (anti-vaxxers, anyone?) & barbarian hordes destroying the infrastructure as they carried away whatever they thought worth taking & the next thing you know, its the Dark Ages. Yippee.

#38 MF on 05.02.19 at 6:36 pm

I’m with Paul Krugman. This sounds like fantasy, and I hope it stays as fantasy. Let me explain:

The loudest voices on the left (and the right) are the ones with the most extreme views. The average person is in the middle and quiet, and just goes about their day trying to improve their lives. That person represents the majority and the majority does not want or need change.

Millennials are just like any other generation. Socialist when young but not when old. Let them grow up like we older millennials have.

Besides the election of Trump was a rejection of leftism, not the other way around.

MF

#39 TurnerNation on 05.02.19 at 6:37 pm

#187 IHCTD9 it’s already here , in the big cities.
Posted here last Rememberance day I was in my local grocery store. At the assigned time a perfectly un-accented voice came over the PA with a short tale and offering. No one broke stride.
If I moved overseas and the local custom was celebrating a war decades ago, many ancestors died, it would mean nothing to me.

That swarm of Benz Kidz you saw there’s many like them in all stripes. It’s a narcissistic nihilistic culture. Unimaginable to rural folks.
This is our UN Agenda 3030 city future. Technology rules. Conformity is gospel. Hive mind minding.

#40 Dogman01 on 05.02.19 at 6:40 pm

#23 Kebo on 05.02.19 at 5:40 pm

To me, the solution to the growing wealth divide is to increase estate taxes and lower income taxes. Why punish hard work and enterprise by taxing income?

Instead tax wealth after death. Maybe make the first 10 million tax free so you can look after dependents and then start progressively increasing. If you’re net worth is 1 billion at death, why not give up 400 million for your country when you die? And offset the gains in estate taxes with reductions in income taxes.

————————————————-
Piketty I think estimated the estate tax only needed to be about 5% to do the job.
But I like your idea, a reasonable reserve of 10 million to your spawn, then a tax at XYZ level.

He makes a good case that while he has merit and is a go-getter. If he was born in Cameron he would own four fruit stands, but as he was born in the USA he leveraged the opportunity, infrastructure, stability and education system the US provides to become a Billionaire.

He owes his success to the supporting system.

https://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014

Lots of good observations in the comments section tonight.

#41 Shawn Allen on 05.02.19 at 6:41 pm

What Backs Our Money?

Spia at 26 said:

Sound money needs to be backed by something of value. Not necessarily gold, but stuff that can be traded… Metals, Widgets, Food, Water… 110010 is not valuable.

*****************************
True, and in our system our money is backed by its value in terms of widgessts, food, waater and everything we consume in the proportions we consume it on average. This is done by central banks controlling inflation at about no more than 2%.

As long as this works we have a consistent system where $1.00 today is worth $1.00 literally tomorrow but is down to about 98 cents in a year and 82 cents in ten years. That has been working pretty well since it is generally not hard to invest cash to offset the inflation.

It is not a perfect system but overall the predictability of the value of a dollar has not been a big problem at all. It was something of a problem back in the 1970’s but has not been lately (like the last 30 years)

It is argued that houses are unaffordable. Yet their prices are set based on supply and demand and every house sold was bought by someone. If house prices are truly unaffordable then the prices must drop and some of that is occurring.

#42 tccontrarian on 05.02.19 at 6:42 pm

“For these reasons traditional economists are having a minor cow. MMT decouples spending from taxing. It eliminates all this fussing about debt, deficits and revenues. Since governments print their own money, it means there’s an endless supply. No reason not to rebuild infrastructure, give everyone a guaranteed income, create jobs and provide lifelong services. Interest rates would be irrelevant since money and goods would be freely available as dictated by government policy and public demand.” – GT

////////////////////////////////

You say this (especially the part: MMT decouples spending from taxing), and yet fail to acknowledge that decoupling ‘money’ from anything real and finite (as gold), also creates problems.

“…for ages now we’d had a form of Keynesian economics in place…This is the way it’s been for the whole time you’ve been alive. It’s worked okay.”

Many would argue that the Soviet Union also ‘worked okay’, for a while. Until it didn’t, of course.

My point is, even highly-flawed systems can ‘work okay’ for quite some time- as evidenced above- but it doesn’t make them ‘good’ or even close to optimal. The hard question is, “what would the last few decades have looked like if (…)”.

There are some who predict a Jubilee of sorts, the Jewish tradition of debt-forgiveness once every 50 years. Interestingly, from 1971, when Nixon severed the USD from gold, it will be 50 years in 2021 – which happens to be my estimated timing for the next bear market bottom, likely to be more severe than the 2008-9.
The negative wealth-effect will be so intense that the social fabric holding western nations together (especially non-homogeneous ones as the USA), will definitely be tested. I fear the momentum towards socialist regimes is only going to gain strength. The fiat money system has enriched the top 10%, but hasn’t worked for the majority; and they will seek out ‘change’, even if it’s for the worst.

This is why I buy gold (ie. not for licking purposes).

TCC

#43 MF on 05.02.19 at 6:43 pm

#29 old dinosaur on 05.02.19 at 6:02 pm

No..

He was voted in (by 4/10 Canadians) on the basis that he wasn’t Harper.

I know you are being a little hyperbolic and maybe facetious, but let’s not get carried away.

MF

#44 AB Boxster on 05.02.19 at 6:46 pm

Democrats win?
Buy gold. Lots of it.

#45 1% Prepper on 05.02.19 at 6:51 pm

If a version of MMT takes hold in Canada, I’m going to give up. I have saved a nice nest egg saved up through sacrifice and delayed gratification. If it becomes worthless due to hyperinflation, then I might as well go over to the dark side

Spend all my money. Borrow and spend more and then declare bankruptcy. Repeat every few years. Work for cash under the table. Rinse, repeat

#46 mitzerboyakaQueencitykidd on 05.02.19 at 6:53 pm

Boy oh boy

#47 Smoking Man on 05.02.19 at 6:55 pm

Do y’all want to know why Trump started Space Force.

https://www.newsweek.com/ufo-sightings-2019-us-military-tic-tac-pentagon-navy-unidentified-aerial-1412272

#48 Trojan House on 05.02.19 at 7:00 pm

The problem with Keynes and MMT is that both were and are theories. At the time, it was just Keynes’ theory of how to run an economy, therefore, by no means a proven way to do it. Same with MMT today.

As for central banks, if anyone actually knew the history of the Federal Reserve in the US, and no I’m not talking about the book “The Creature from Jekyll Island,” but the actual reason why it was established, then maybe people would understand what happened and how the government at the time hijacked it for their own purposes.

Speaking of the government, their natural course is to default. That’s the way it has happened countless times throughout history. Of course, nothing is for certain, but I can almost guarantee the US govt will default and along with it most other western countries.

And then there’s AOC…

#49 tccontrarian on 05.02.19 at 7:01 pm

#15 SunShowers on 05.02.19 at 5:17 pm

#7 Mean Gene on 05.02.19 at 4:56 pm
I think everyone needs to watch Doctor Zhivago, to get an idea what can happen when the people pull down the elite and try to implement their version of a idealistic country.

There was that scene where Yuri returns to his house in Moscow with the family and discovers the Soviet Government has turned it into a tenement, basically everyone has a place to live but it is a shithole (crummy). But hey, everyone is equal.

———————————————————–

Socialism means having to give up control of your private property to other people! Things like your car and your home would have to be shared with others! Thank goodness that doesn’t happen under capitalism!

Now if you’ll excuse me, I need to finish my Uber shift before my AirBNB guest arrives.
—————-

Haha! One small difference (a BIG one actually): you DON’T have to work Uber and you DON’T have to AirBnB your home either! These are CHOICES you made.
Made me laugh anyway…

TCC

#50 Remembrancer on 05.02.19 at 7:07 pm

#23 Kebo on 05.02.19 at 5:40 pm
To me, the solution to the growing wealth divide is to increase estate taxes and lower income taxes. Why punish hard work and enterprise by taxing income?
——————————
Why punish accumulating assets and not spending every last dime in your pocket as soon as you get it from that hard work and enterprise (which was already taxed)?

#51 Mike on 05.02.19 at 7:10 pm

Here’s the truth behind MMT:

https://www.armstrongeconomics.com/world-news/central-banks/modern-monetary-theory-v-central-bankers/

Here’s the truth about Central Banks:

https://www.armstrongeconomics.com/armstrongeconomics101/economics/the-end-of-keynesian-monetarist-theory/

QE has destroyed Keynesian Economics and we’re now down a path never before travelled.

#52 Bobby on 05.02.19 at 7:18 pm

I look forward to the day when the lefties are towing a trailer of money behind their bikes just to buy an avocado toast. Most who subscribe to these theories haven’t grasped that success is usually tied to hard work. Rather they believe it is their right, they are entitled to have it all.
I think the runaway gas prices on the west coast are the best thing that can happen to B.C. Most who support the NDP/Green coalition have little or no economic or fiscal sense but are starting to see the reality of their decision.
No, nothing is free and in the end someone actually pays. Usually they realize the joke is on them as they are really the ones paying.

#53 Flop... on 05.02.19 at 7:22 pm

#172 Flop… on 05.02.19 at 1:50 pm
Today’s happy seller… but shows you how ridiculous some asking prices were…

6188 MACDONALD STREET, Vancouver

Just sold for $9,800,000

Was asking as high as $21,898,000 in 2016

2018 Assessed: $11,107,000
2017 Assessed: $12,214,000

crazy people or market or both?

//////////////////

Don’t do that.

I don’t want comments contributed to me.

I can get myself in trouble, thanks.

Choose your own handle or if you want me know something or call yourself “For Flop” or something like that, as people have in the past.

Thanks for the help, but you’ve gotta get your own name.

One Freedom First.

One Mark.

Etc.

If you can’t come up with something original then you shouldn’t bother commenting.

One love.

One Flop…

M44BC

#54 Andrew on 05.02.19 at 7:23 pm

Please don’t lump bitcoin in with the rad-left or MMTers, that would be highly inaccurate. Bitcoin is the antithesis of this endgame Keynesians brought on themselves. It is more likely we see central banks hold bitcoin in their reserves than them disappearing completely.

You spell out Keynesian econ, as well as the radical MMT rise. Do your readers a favour and teach them of the Austrian school that saw the world flourish under it in the later half of the 19th century and the early 20th. I’m not romanticizing the era/past but it wouldn’t hurt to give the broad perspective of what bitcoin advocates are working towards. Sound money putting restraints on central planners who stifle free market capitalism.

Capitalism would likely flourish under a return to sound money.

Your alternative is MMT. Despite your understandable hesitation on bitcoin, it doesn’t know you exist and it will be here when you really do need it.

Regardless of how we can argue that we are living in the most peaceful of all times, with the most amount of people being lifted out of poverty etc. That isn’t the perspective of the masses, their truth is a broken system. Bitcoin is the way out, how we want to get there is the question. Through disastrous, violent experiments with MMT, or transition while enough order still remains in the fabric. Unfortunately history says the former. I wish us all luck as this unfolds.

For those interested in bitcoin and Austrian economics, the definitive introductory book is

The Bitcoin Standard: The Decentralized Alternative to Central Banking https://www.amazon.ca/dp/1119473861/ref=cm_sw_r_cp_api_i_gU3YCb99SWYH1

#55 R Bergman on 05.02.19 at 7:25 pm

Agree, future entitled gen, and voting factors present an issue.
Grandparents lived through German devaluation, sacks of paper to buy bread, etc. They feared paper currency, banks, gov’ts, etc.
Simple Q, where does one go, where does one live, where do folks who wish to preserve a standard of living, an modicum of what they have worked hard to create and build, go??
Socialism, etc, is simply equal sharing of misery, but, voters, many entitled and “taker” class, versus “builder” class want what other have. Without the work, risk, or effort.
Crazy times, but paper money may truly become curb fodder, once worthless, and not worth anything.
Africa, Venezuala, erc, etc, value of the “paper” is nada.
What to do??? That is the question.

#56 Dogman01 on 05.02.19 at 7:27 pm

“Same as when I call a man a fruit loop.” – Garth

Brilliant – you see where it is coming from and where it is going.

“I skate to where the puck is going to be, not to where it has been.”.- The Great One

#57 Nonplused on 05.02.19 at 7:33 pm

One of the problems with MMT, at least in the US, is that the government does not own the Federal Reserve, the banks do. The banks are not interested in having the value of their bonds crash, so they won’t voluntarily implement MMT. Therefor congress would have to issue their own currency, which they can according to the constitution. But then you would end up with 2 currencies in the US, the Federal Reserve Note we currently refer to as the dollar (which it’s not, a dollar is constitutionally defined as 360 grains of silver, but that’s an old story and no longer relevant), and some sort of new “Lincoln Greenback”. So there is precedent for MMT even within the US but the experience will likely be the same, the new currency will quickly become worthless and people will prefer Federal Reserve notes when they can get them.

#58 Keynes was...a Ba$tard on 05.02.19 at 7:34 pm

Since we’re talking about Keynes, here’s a take on the man. First, some snippets of what’s he said:

“For a little reflection will show what enormous social changes would result from a gradual disappearance of a rate of return on accumulated wealth.”
***
“In short, the aggregate return from durable goods in the course of their life would, as in the case of short-lived goods, just cover their labour-costs of production plus an allowance for risk and the costs of skill and supervision.
***
Now, though this state of affairs would be quite compatible with some measure of individualism, yet it would mean the euthanasia of the rentier, and, consequently, the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity value of capital.”
***

In 1922, within “The Economic Consequences of the Peace”, Keynes states this:

“Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become “profiteers,” who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.”

//////////////////////

So, all these ‘problems’ were already recognized a century ago. Perhaps part of an evil plan? Who knows…

The Anti-Keynesian

#59 not 1st on 05.02.19 at 7:36 pm

We all know what fake news is, well AOC is the first fake congress woman. Elected by twitter nerds. No qualifications needed. Makes Trudeau look positively competent.

#60 Reximus on 05.02.19 at 7:46 pm

#48 “The Creature of Jekyll Island” made me laugh at how it was written for people who never did Finance 101…

#61 Azashi on 05.02.19 at 7:47 pm

>But a byproduct has been a bigger wealth gap and that ever larger mountain of debt.

“What are incorrect statements about economics, Alex?”

The wealth gap was small during the Keynesian era – 1945-1980. It grew when we moved away from it, during the Reagan/Thatcher years.

Incidentally, the wealth gap was really high BEFORE Keynes, too.

#62 The most interesing West Coast Conspiracy Theorist in the world on 05.02.19 at 7:51 pm

That’s right man.

Use BC as an example for the rest of Canada.

Here is BC we are turning cold on money laundering. Sending it over to Doug Ford.

We are seeing real gains in the out of control housing market finally starting to be controlled and reigned in.

This would have never have happened under the Libs.

And now, we are seeing detached houses in Ladner listing in the 800s.

Remember, it was just a few short years ago these same comparable houses in Ladner were listing for 1.4M.

And like Mr. PimpCo said…you are going to see this accelerate this year.

The rest of BC is swimming around in the money not realizing that the biggest Tsunami of money ever to wash through BC is has reversed and is full on retreating back into the Ocean which is going to leave the entire province high and dry.

I have never in my life seen such a downturn as what is happening in Vancouver right now.

#63 Brian Ripley on 05.02.19 at 7:53 pm

Cullen Roche does an excellent job of explaining banking, central banking and treasury operations:
https://www.pragcap.com/category/myth-busting/

My Vancouver Housing charts with April data are up
http://www.chpc.biz/vancouver-housing.html

It’s quicksand for near term buyers.

#64 Long-Time Lurker on 05.02.19 at 7:55 pm

Let’s see if I got this right? Any takers?

MMT (or @ss-backwards)

So, hypothetially, let’s use MMT to create national daycare. Let’s put the cost at $500 million per year for facilities and workers. We print this $500M and dole it out to buildings and babysitters.

Now if we don’t take this $500M per year out of the economy it will cause increasing inflation: more money is in existence so the same amount of goods/services costs more money. So it is necessary to take this money out of the system. How? Well, it’s in the general monetary system so it has to be taxed. (If you burn your bonds to destroy money, you just shafted your bond-holders and your bonds would be worthless and no one would buy your debt.)

So how do we tax it? The most accurate way to remove it would be to tax the national daycare’s buildings and babysitters; but if we do that we just shafted them and paid them nothing. So we have to raise general taxes. If we raise general taxes then everybody just got taxed for the amount of $500M. It’s the same as raises taxes and then spending it on national daycare.

So what was accomplished? Tax and spend versus spend and tax?

Addenum: Quantitative Easing. It never caused inflation because the money never got into the general monetary system. It stayed on the banks’ balance sheets as created bonds (central bank money creation) and gets destroyed as the bonds expire and are not renewed. Think of QE as increasing liquidity so banks can make more loans and stimulate the economy.

#65 Spectacle on 05.02.19 at 8:00 pm

#27 Hawk on 05.02.19 at 5:56 pm
#19 Leftover on 05.02.19 at 5:25 pm

Agreed and well said, except that people are not even equal in that poverty. That is the greatest lie of all socialists / communists.

Castro, Chavez & fat boy did mot and do not remotely participate (endure) the “equality” they impose on their fellow citizenry!!!!
——————————–
Exactly.
Cuba is now in serious trouble.
The grocery outlet shops that used to carry food are now empty. It began last Christmas when you couldn’t do any baking because there was no flower to be had.
The people of Cuba are going to go hungrier than they did in the past.
What is Canadian PM stupid socks, oh we sooo love Castro, doing? Zero. Nothing. Oh, destroying The fabric of Canada, that’s what.

Follow Sir Turners advice and protect your financial growth!

#66 akashic record on 05.02.19 at 8:03 pm

Keynes never knew the concept of “too big to fail”.
That’s where it all falls apart.

We now also have giant beyond multinational “companies” (e.g. Google, Facebook) which are monopolies with extreme weight on shaping political power.

This Capitalism is not Keynes’s Capitalism.

This Capitalism doesn’t have its Keynes.

It’s all on improvised autopilot, while Communist China is becoming the top economy.

#67 Spaccone on 05.02.19 at 8:09 pm

MMT — sounds like an Argentina thing or PIIGS pre-Euro

I brought back a bit too much ARS a few years ago (a few hundred I believe), I knew offhand that it had lost at least a quarter of its value but checking now it seems to have maybe lost around 75-80% of its value vs CAD$.

Prices already don’t make much sense in Canada. I’m already at a point where I don’t even bother with many services/goods because I already know everything is overpriced.

#68 Yanniel on 05.02.19 at 8:10 pm

MMT reminds me of the perpetual motion machine.

#69 Eco Capitalist on 05.02.19 at 8:24 pm

The moment we adopt MMT I’m becoming a prepper.

#70 Sold Out on 05.02.19 at 8:25 pm

I have to say Garth, for someone who consistently preaches “attack the policy, not the man” wrt Trudeau, you did manage to choose the least flattering photo of AOC that you could dig up.

Seriously? – Garth

#71 Brian on 05.02.19 at 8:34 pm

Garth – I don’t defend everything AOC says, but her response would be – well, RePubs just spent 2 trillion ?? on tax cuts for billionaires, unfunded of course, plus how many trillion on foreign adventures? – kinda, you know, unfunded as well – so how about spending some on health care, education and cleaning up the environment?

So on somethings she does kinda have a point

Most of the tax cut benefited corporations which employ people. No coincidence unemployment is headed for a 50-year low. – Garth

#72 Grumpy Auld Scott on 05.02.19 at 8:43 pm

Buy Gold.

#73 AACI Homedog on 05.02.19 at 8:43 pm

We would be in a much better economic state now if BC still had Christie, and if federally we still had Harper. Sigh.

#74 Dave on 05.02.19 at 8:59 pm

This was pretty heavy. I feel dumb… I had to read it 2x and still don’t totally understand.

#75 Mr Happy on 05.02.19 at 9:16 pm

You know Garth…. You talk of Moisters, Millennials, what would you call someone who made a buttload of cash on real estate….is 56 years old…4 million in the portfolio…retired with homes overseas….pulling nice dividends…

Wait…. never mind…..I don’t frickin’ care….. lol

I see my own family…nephews and nieces…struggling to get by but still sucking on their $6.00 Lattes. Idiots….

I was brown bagging and Mrs Happy was making Folgers to put in my thermos. Today, we fly business class 2 -3 times a year…enjoying life…. Financial guy confirmed we have enough cash to last us to 95!!

That’s how you do it. Old fashion SAVING…penny at a time. My GrandDaddy told me…”If you don’t respect the nickel…you don’t deserve the dollar!”

Ok… Mrs Happy says stop typing when I am drinking….gotta go…..

Cheers!

#76 crowdedelevatorfartz on 05.02.19 at 9:17 pm

@#70 Sold Out
“you did manage to choose the least flattering photo of AOC that you could dig up.

******

There’s a flattering pic of AOC?

totally off subject but…..
She does kind of look like me on a crowded elevator

#77 Ronaldo on 05.02.19 at 9:24 pm

#31 espressobob on 05.02.19 at 6:18 pm
There was a time in the early 19th century when aluminum was more valuable than gold.

It’s ironic what people consider a store of wealth.
—————————————————————-
Tulips come to mind.

#78 Rexx Rock on 05.02.19 at 9:28 pm

It doesn’t matter where you live, we’re all slaves by taxation through goverment extortion.Some countries are better than others.Cost of living in Canada is bad because of the complete incompetence of the Central Bank and our socialist/communist goverment.Choose your country wisely or suffer the consequences.

#79 Ronaldo on 05.02.19 at 9:29 pm

#6 Graeme on 05.02.19 at 4:48 pm
Buying at least some gold makes a little more sense every day as of late
—————————————————————-
Makes more sense to buy the companies that produce the stuff.

#80 Ken M. on 05.02.19 at 9:42 pm

All this in a country with $22.2 trillion in national debt and a budget deficit which this year will hit $1 trillion.
=============

But smoking man says it the greatest.
Greatest in debt.

#81 Remembrancer on 05.02.19 at 9:42 pm

#69 Eco Capitalist on 05.02.19 at 8:24 pm
The moment we adopt MMT I’m becoming a prepper.
——————————————————–
Dude, that’s literally the opposite of what prepper means.

#82 southseacompany on 05.02.19 at 9:47 pm

“Mr. Keynes postulated that when times suck (like 2008) central banks should stimulate the economy by crashing interest rates and increasing demand.”

What you’re describing is Monetarism, not Keynsianism

Keynes primarily promoted fiscal stimulus (government spending, specifically on public works to create jobs).

Using the central banks to lower rates is monetary stimulus, not fiscal stimulus, and that was promoted by the Monetarists (like Milton Friedman), who were arch-enemies of the Keynesians.

Using interst reates to spur the economy is montary st

Fiscal and monetary policy – two peas in a pod. – Garth

#83 akashic record on 05.02.19 at 9:48 pm

We had previously a discussion here about Mueller’s shifting from collusion to obstruction, once the “Russia won the election to Trump” theory could not be supported by legally sound evidence, despite the DNC-financed “dossier” that triggered the entire special council investigation.

We now have a fascinating insight.

“This is a story about a legal chess match played for the highest stakes imaginable: Trump’s Presidency – and whether it would be under the cloud of an endless special counsel investigation – hinged on the result.

John Dowd, Ty Cobb, Jay Sekulow, and the rest of President Trump’s personal legal team were on one side. Mueller, Andrew Weissmann, and the Special Counsel’s office were on the other.

The dispute was a year-long struggle over the meaning of 18 U.S.C. § 1512(c)(2).

No judge ever ruled on who was right about the meaning of this obstruction statute. No formal decision was ever rendered.”

https://humanevents.com/2019/05/01/checkmate/

#84 NewNormal on 05.02.19 at 9:50 pm

I agree with a high estate tax. A modern day landed gentry will help no one and the isolation extreme wealth provides is a huge societal problem, especially when it goes from generation to generation.

The other thing we should look at is stopping the accumulation of wealth in charitable foundations. These organizations give huge power to influence society and policy to a select few outside of the Democratic system while lawfully avoiding tax in the name of the “public good”.

If people truly believe in a cause, they would give absent a tax benefit…

#85 Changeemall on 05.02.19 at 9:50 pm

This monetary experiment is already at the end of it’s cycle in Japan and Europe. Both are trapped. Both destroyed thier bond markets.

#86 Bobc on 05.02.19 at 9:54 pm

#71 Brian

Businesses don’t pay taxes they collect them. Every penny collected in taxes from corporations comes from their customers. Double their taxes and they raise their prices.
Lower corporate taxes lowers our cost of living. Still don’t get it? Here’s a 3 minute video that can explain it in simple terms.

https://YouTu.be/TOCTlz-A8n0

#87 Ace Goodheart on 05.02.19 at 9:55 pm

MMT is just communism.

There is nothing more to this.

It’s sad that a generation of North Americans have somehow been driven to communism.

However, they’re millenials, so it doesn’t really matter.

The generation coming after them is better.

Just flush the toilet and move on….

#88 Figmund Sreud on 05.02.19 at 10:11 pm

… the moisters seem to be lining up behind a new economic model for the world – one where wealth inequality is replaced by a sharing utopia.
_________________________________

Surprised? I wouldn’t be, … we currently waddle into the beginning stages of a new political reality best defined by the word populism. It’s true, … (consider, as proof, the current flurry of denunciations of populism by the mainstream media, et al., to realize it’s significance).

Most simply put, populism is the stance that states that the majority has the right to have a voice in the making of collective decisions.

Of course, antonym of populism is elitism – the word the mainstream media refuses to utter in its proclaims: the stance that only the self-appointed, Self-Chosen People, have the right to a voice in decisions.

… and that’s a core feature why everything seems to be going to bits, … in a nutshell!

Best,

F.S: Calgary, Alberta.

#89 Blacksheep on 05.02.19 at 10:14 pm

#48 Trojan,

“As for central banks, if anyone actually knew the history of the Federal Reserve in the US, and no I’m not talking about the book “The Creature from Jekyll Island,” but the actual reason why it was established, then maybe people would understand what happened and how the government at the time hijacked it for their own purposes.”
——————————–
As a fan of this book, I’m curious about your take on what went on and what I may be missing.

Lincoln?

Jefferson?

Please share, if you would…

#90 Geoff on 05.02.19 at 10:17 pm

Morneau Shepell is pissing off Nova Scotia Doctors over sick note demands:

https://www.cbc.ca/news/canada/nova-scotia/ns-doctor-fights-sick-notes-1.5118809

#91 Blog bunny on 05.02.19 at 10:20 pm

”an economic system which can provide full employment, give everyone a guaranteed income, free education and health care plus solve the climate crisis.”

That sounds like the economic system in which I grew up. Did I mention that people had to line up for days in order to get basics like shoes or baby milk powder ? Definitely beats standing in line for a condo though.

So what is left in a society that removes all incentive for hard work and profit ? Booze, hookers or religion. Unfortunately, we had to run because the government had an issue with the last item on the list. That’s how we ended up in Canada. So Canada, please do not make the same mistakes.

#92 crowdedelevatorfartz on 05.02.19 at 10:35 pm

@#75 Mr Happy
“That’s how you do it. Old fashion SAVING…penny at a time.
My GrandDaddy told me…”If you don’t respect the nickel…you don’t deserve the dollar!”

*****

100% agreement .
Unfortunately, the jealous, dont want to hear the truth.

As Ricardo Montalban once said so eloquently…..
This is the new motto of the middle class at the “rich” or anyone with more than them……

https://www.youtube.com/watch?v=VYPsoxpt0BU

#93 the Jaguar on 05.02.19 at 10:49 pm

David Rosenberg (who contributes to the G&M on occasion) wrote an interesting article ( google ‘The Real Crisis for the U.S. Economy isn’t Infrastructure or Taxation: it’s Labour Quality) in 2017. Worth a read.

Essentially he outlines that the ‘dirty little secret’ nobody talks about is that 23 million americans in their prime working years are not engaged in a ‘labour search’. He wrote ‘this is 25% above normal levels and an acute dead weight on the american economy’.

If you consider the drug crisis in many american cities where manufacturing jobs were shipped overseas and where many refuse to take jobs they consider ‘beneath them’ that go to new immigrants who just want to get ahead in a real democracy, etc., it makes a lot of sense. If somebody like AOC comes along with an offer of guaranteed income, social benefits, and resurrection of self esteem won by inclusion in large numbers of people looking to regain their self respect this way one can see how there could be political capital in that approach. Very sad in my opinion.
Guess the Jag is out of touch. Still thinks the only way out is straight through. Everyone will be tested, and wealth can be measured in many ways, including hard currency. But hard currency measured another way is character, tenacity, and kindness. Always try to be brave. Even if you don’t feel like it. It’s got a high oxygen content, and can’t imagine what it might trade at if on a major stock exchange.

#94 MF on 05.02.19 at 10:51 pm

87 Ace Goodheart on 05.02.19 at 9:55 pm

100% bull crap. Pay attention.

As you are seeing, the generation after us (generation z) is just starting to repeat the errors of the silent generation, with violent ideological outbursts.

They seem to be unable to separate the online world from realty. We aren’t like that.

Sad and pathetic.

MF

#95 SunShowers on 05.02.19 at 10:57 pm

#50 Remembrancer on 05.02.19 at 7:07 pm
Why punish accumulating assets and not spending every last dime in your pocket as soon as you get it from that hard work and enterprise (which was already taxed)?

———————————————-

Because accumulating assets doesn’t keep the economy going. Consumption (spending) does.

#96 Lorne on 05.02.19 at 11:13 pm

#52 Bobby on 05.02.19 at 7:18 pm

I think the runaway gas prices on the west coast are the best thing that can happen to B.C. Most who support the NDP/Green coalition have little or no economic or fiscal sense but are starting to see the reality of their decision.
No, nothing is free and in the end someone actually pays. Usually they realize the joke is on them as they are really the ones paying.
…….
Yes, they are seeing the reality of higher gas prices…last time BC had prices even close to this, oil was $146 a barrel….it is now about $63 a barrel. Wonder who is reaping in the excess profits? Gotta love those corporations…and the joke is on the customer!

#97 PastThePeak on 05.02.19 at 11:15 pm

#91 Blog bunny on 05.02.19 at 10:20 pm
”an economic system which can provide full employment, give everyone a guaranteed income, free education and health care plus solve the climate crisis.”

That sounds like the economic system in which I grew up. Did I mention that people had to line up for days in order to get basics like shoes or baby milk powder ? Definitely beats standing in line for a condo though.

So what is left in a society that removes all incentive for hard work and profit ? Booze, hookers or religion. Unfortunately, we had to run because the government had an issue with the last item on the list. That’s how we ended up in Canada. So Canada, please do not make the same mistakes.
+++++++++++++++++++++++++++++++++

As I often tell people – I think there is ample evidence in the last 20 years that points to the solution to the Fermi Paradox…we are living it…

#98 Deplorable Dude on 05.02.19 at 11:15 pm

Well if gas gets much more expensive here in BC we might have an outbreak of Yellow vests here…that’s what started it all in France.

Comrade Horgan is simultaneously trying to stop a new oil pipeline from AB, while trying to stop the current one from being cut off….talk about sucking and blowing at the same time.

———————

#83 Akashik Record

That’s a great article. Truly the highest level chess game. Nothing more than the US Republic at stake.

Barr and Trump will bring the seditious elements within the US government to justice for their attempted coup. Mueller was a failed attempt to cover it up by trying to nail Trump for obstruction.

The house of cards is starting to collapse.

Just today the New York Times (in an attempt to get ahead of the upcoming IG report on FISA abuse) published a stunning article admitting the FBI spied on the Trump campaign….after telling us for 2 years it was just a Trump conspiracy.

It’s gonna be delicious to watch the swamp go down.

#99 Millennial Realist on 05.02.19 at 11:20 pm

We are taking over, Garth. Deal with it.

Millennials now dominate the electorate. And the short-sighted self-interested greed of Boomers has given us little choice but to consider radical changes.

By the way, Garth, Millennials now also control our language:

So, henceforth, the term “Moister” shall refer to foul-smelling, diaper-wearing Boomers in need of a change of undergarment.

So Boomer Moisters, run along and get yourself dry and fresh!

Be part of the change.

Or be run over by it.

#100 Sebee on 05.02.19 at 11:30 pm

Politicians want to break it so they can fix it. Same old story.

Politicians are a special breed indeed.

What we need to do is stop letting politicians decide for us. We can vote on American Idol, we can vote for details of policy.

#101 Shawn Allen on 05.02.19 at 11:31 pm

Do Corporations pay taxes?

#86 Bobc on 05.02.19 at 9:54 pm said:

Businesses don’t pay taxes they collect them. Every penny collected in taxes from corporations comes from their customers. Double their taxes and they raise their prices.

Lower corporate taxes lowers our cost of living. Still don’t get it? Here’s a 3 minute video that can explain it in simple terms.

***********************
That sounds right in theory. And it would be true for businesses that face stiff price competition.

But the fact is when Trump lowered income taxes drastically for 2018 the expectations for the S&P 500 companies was that almost every last dollar of the lower taxes would fall to the bottom line as higher profit and not lower prices. And that is basically what happened. Check the huge increase in S&P 500 earnings in 2018.

My conclusion. Those S&P 500 companies did not face much competition on price.

#102 IHCTD9 on 05.02.19 at 11:56 pm

#81 Remembrancer on 05.02.19 at 9:42 pm
#69 Eco Capitalist on 05.02.19 at 8:24 pm

The moment we adopt MMT I’m becoming a prepper.
——————————————————–
Dude, that’s literally the opposite of what prepper means
——-

I think what Eco is saying is that the minute we adopt MMT, the economy, financial system, and currency is guaranteed burnt toast, so it’s time to start loading up on ammo and freeze dried food.

I’d be right there beside him/her.

Check out Canadian Prepper on YouTube for the finer points of surviving any apocalypse :) (Sorry noname!)

#103 Ponzius Pilatus on 05.03.19 at 12:21 am

#49 tccontrarian on 05.02.19 at 7:01 pm
#15 SunShowers on 05.02.19 at 5:17 pm

#7 Mean Gene on 05.02.19 at 4:56 pm
I think everyone needs to watch Doctor Zhivago, to get an idea what can happen when the people pull down the elite and try to implement their version of a idealistic country.

There was that scene where Yuri returns to his house in Moscow with the family and discovers the Soviet Government has turned it into a tenement, basically everyone has a place to live but it is a shithole (crummy). But hey, everyone is equal.

———————————————————–

Socialism means having to give up control of your private property to other people! Things like your car and your home would have to be shared with others! Thank goodness that doesn’t happen under capitalism!

Now if you’ll excuse me, I need to finish my Uber shift before my AirBNB guest arrives.
—————-

Haha! One small difference (a BIG one actually): you DON’T have to work Uber and you DON’T have to AirBnB your home either! These are CHOICES you made.
Made me laugh anyway…

TCC
———-
Of course he has to work.
He is a modern day slave.
Yes Master Uber and Master Airnb.
Pretty sad, actually.

#104 Politico on 05.03.19 at 12:29 am

Sleepy Joe has announced his campaign slogan for 2020: “Make American Moral Again”. Or “MAMA!” for short. Seems about right.

If you are betting online, take Trump. If this is the best the Democrats can come up with, it promises to be a landslide. Remember, a vast majority of US voters never thought America was “immoral” (although maybe Trump is), so sleepy Joe should have probably stayed in bed.

Also notice how the nick-namer in chief carefully avoided the “creepy Joe” nick-name some are using? Very well done. “Sleepy” sounds a lot like “creepy” but can’t be viewed as being quite so underhanded.

#105 Stan Brooks on 05.03.19 at 12:43 am

MMT is a scam, way for bankrupt governments to finance uncontrolled spending/deficit when there are no buyers for their junk bonds (and why would there be, at inflation 8-10 % and ‘rates’ at sub 2 %?).

Of course it will be highly inflationary, the last nail in the coffin of savers and retirees, people on fixed income in zero interest rates environment, while governments are printing money at will.

The worse part is that such spending will not generate new jobs in an era of automation, money will flow to the companies, in this case to out beloved oligopolies who control markets and prices.

Asset prices for everything non-consumer related (i.e houses excluded) will continue to climb.

Less money in the pocket, ever diminished savings, worthless dwellings in an economic wasteland, ever increasing prices of essentials, retirement mission impossible, further increasing private debt, ever increasing taxes and regulations, worthless education, no jobs is pretty much guaranteed for like, forever.

In 10 years 50 % of jobs will disappear.

In 20 years probably 70-80 % leaving government jobs only and the rest on ‘guaranteed income’ GMO food diet.

The governments are totally unprepared for that.

The beauty of it is that governments are incentivizing in any shape or form possible ‘investment’ in government bonds.

With MMT they don’t sell bonds and the proud diversified bond holders would be left with significant inflation and close to zero nominal return, in reality huge real loss on investment.

An engineered theft and rip-off of savers.
Control of money is in the domain and sovereignty of a country but within certain limits. Look at Venezuela, they have more and cheaper oil than us, it surely is working pretty well for them. :(

#106 Smoking Man on 05.03.19 at 1:18 am

80 Ken M. on 05.02.19 at 9:42 pm
All this in a country with $22.2 trillion in national debt and a budget deficit which this year will hit $1 trillion.
=============

But smoking man says it the greatest.
Greatest in debt.
……
Sorry dude but lake Ontario has shit waves. I’m a surfer now. Getting rock solid abs. You can find me on a short board at Huntington beach every second week end.

Vegas is just to close for the other week end.

Living the dream dogs. I’m 5 years past when an over schooled MD said I’m done. My guess he voted for T2 and thinks man made climate change is real.

I have never been happier in my entire life.
Green palm trees with a back drop of pure blue sky will put any savage in a good mood.

Just avoid the Hollywood weirdos. , they like kids a bit too much.

#107 Smoking Man on 05.03.19 at 1:56 am

If you ever get on the list of stage 4.

Don’t feed it orange juice or salads. The little hungry beast will get fat and brave on that diet.

Kill it with burbon and Nicotine.

#108 espressobob on 05.03.19 at 2:00 am

#77 Ronaldo

Stilll working with fosteriana grown in bauxite

It has potential.

#109 Smoking Man on 05.03.19 at 2:23 am

DELETED

#110 Bloke in UK on 05.03.19 at 2:30 am

Over here in the formerly United Kingdom, we have in our Shadow Chancellor a noted Marxist / Leninist enthusiast for MMT. The Government can’t owe itself money, he opines, and debt will just be cancelled so prog spending can gush. Nationalisation will provide money for spending. And craziest of all, he believes that every £ spend by Government actually produces about £1.60 in economic value, so the more he spends, the richer the country becomes!

Like the rest of the lunatic Left, he’s barking, howling mad. I mean, printing money worked so well for Austria, Germany, Venezuela, Argentina, Zimbabwe and others – but the young never knew that world. They never knew a Socialist administration here which bankrupted the country leaving the UK to beg a handout from the IMF of just one measly billion pounds to keep the lights on. Never knew the strikes and economic collapse of the 1970s with the dead unburied, uncollected domestic and industrial waste filling the streets and everywhere up to its fetid neck in rodents. Trains that might or might not run, at the whim of the drivers, or the signalmen.

We might have the most useless, corrupt political leadership the UK has ever seen, but that’ll pale into insignificance if the Labour Party take control and introduce their “free everything for everyone and by the way let’s declare a Climate Emergency” policies based on MMT and a socialist takeover.

The young and the disaffected will learn – too late.

#111 Crazyfox on 05.03.19 at 4:37 am

The U.S. is living on printed money now. MMT is already here. Their federal govy is spending a trillion more than they take in on tax revenues, spending an estimated 4.4 trillion and taking in 3.4 trillion in revenues. Its only 29 % more than they generate in revenue. Recipe for hyperinflation anyone? If T2 tried that here, we’d have his head on a pike and rightfully so.

Their economy is great? A trillion dollars in borrowed gov spending is only 5% of their GDP. 3 and 3.5% GDP growth? Whats not to like right? Great #’s everywhere. Except for the small fact that this “growth” as they call it, doesn’t offset what the government borrowed to make it happen.

Economic growth no longer exists in the U. S., its all from borrowed money. If the U.S. federal gov reduced spending by a trillion to balance, their nation would be in an ugly recession, so we just continue on, watching a Russian sanctioned WH introduce budgets and tax cuts that make no economic sense in the long term to anyone except U.S. adversaries and short term profiteers gaining at everyone else’s expense. Y’know… like big oil screwing us at the pumps as we speak but I wander.

For me, nothing has changed. Moving away from merit based economies are no longer my greatest concern and truth again be told, that train has already left the station. Climate change is civilizations biggest threat or should I say, lack of morality to even remotely attempt to face climate change and all of its causes, is our biggest threat. Our love of money is more important to us (I speak generally of course), our reward for freely polluting our environments is more important to us than even trying to remotely accept the possibilities of the deadly consequences that follow.

I find it quite challenging to empathize with those who are so blinded by greed that they are willing to live a deluded life to pursue fleeting riches at everyone else’s expense including their own… when the outcome is universal bankrupcy and everyone loses everything they thought mattered including for most, their lives because their chosen God was lifeless and false.

#112 Howard on 05.03.19 at 4:44 am

#74 Dave on 05.02.19 at 8:59 pm
This was pretty heavy. I feel dumb… I had to read it 2x and still don’t totally understand.

————————————

Money-printing to infinity.

There, understand now?

#113 Incubus on 05.03.19 at 6:54 am

With this kind of system who would be interested to work ? and at what price ?

#114 oh bouy on 05.03.19 at 7:51 am

@#94 MF on 05.02.19 at 10:51 pm
87 Ace Goodheart on 05.02.19 at 9:55 pm

100% bull crap. Pay attention.

As you are seeing, the generation after us (generation z) is just starting to repeat the errors of the silent generation, with violent ideological outbursts.

They seem to be unable to separate the online world from realty. We aren’t like that.

Sad and pathetic.

MF
________________________

lol, generalize much? whats sad and pathetic is how every generation bad mouths the incoming gen.

thank god the sentiment on this comments section is far removed from reality.

#115 Tater on 05.03.19 at 8:38 am

#48 Trojan House on 05.02.19 at 7:00 pm
The problem with Keynes and MMT is that both were and are theories. At the time, it was just Keynes’ theory of how to run an economy, therefore, by no means a proven way to do it. Same with MMT today.

As for central banks, if anyone actually knew the history of the Federal Reserve in the US, and no I’m not talking about the book “The Creature from Jekyll Island,” but the actual reason why it was established, then maybe people would understand what happened and how the government at the time hijacked it for their own purposes.

Speaking of the government, their natural course is to default. That’s the way it has happened countless times throughout history. Of course, nothing is for certain, but I can almost guarantee the US govt will default and along with it most other western countries.

And then there’s AOC…
—————————————————————-

How does the US default on USD denominated debt, when they can simply print more USD?

#116 Remembrancer on 05.03.19 at 8:46 am

#111 Crazyfox on 05.03.19 at 4:37 am
I find it quite challenging to empathize with those who are so blinded by greed that they are willing to live a deluded life to pursue fleeting riches at everyone else’s expense including their own… when the outcome is universal bankrupcy and everyone loses everything they thought mattered including for most, their lives because their chosen God was lifeless and false.
————————————
I have long contended that the technology that can lead to the Fermi Paradox (https://en.wikipedia.org/wiki/Fermi_paradox) is not some exotic zero point energy power source or cold fusion bomb that does a civilization in, its the development of Reality TV and by extension, self-curated false life narratives of the likes of Facebook, Twitter and Instagram aided and abetted by made for your own personal bias’ content channels – oddly in cahoots with more paleo tech via extremist talk radio like some bad 1980s self motivational “define your own future” late night self help systems advertising – giving a full spectrum media onslaught to increasingly uncritical thinkers – organically (no sorry, no mastermind insert your least favorite billionaire here who endlessly schemes to rule the world) fostering an age of unenlightenment if you will, bookended by 30 second commercials and side bar ads based on your browser history and ad auctions happening in real time at the speed of light)…

The separation of the perception of reality from inconvenient facts leading to “fake news”, “alternate facts”, anti-vaxxers flat earthers, and their ilk can last for awhile, but reality has a nasty habit of asserting itself despite what you believe, or feel or who you follow on social media, b/c its like, reality… regardless of whether you go for Bitcoin or MMT or shiny rocks for that matter…

But hey, its Friday, party on and stay frosty blog dogs…

#117 n1tro on 05.03.19 at 8:53 am

#64 Long-Time Lurker on 05.02.19 at 7:55 pm

Addenum: Quantitative Easing. It never caused inflation because the money never got into the general monetary system. It stayed on the banks’ balance sheets as created bonds (central bank money creation) and gets destroyed as the bonds expire and are not renewed. Think of QE as increasing liquidity so banks can make more loans and stimulate the economy.
————————–
^ I don’t think that summary is completely accurate. I know that is what was said by the likes of Ben Bernake but by keeping rates low and providing “liquidity”, there would be no inflation if the liquidity was used for productive purposes and NOT goosing real estate market or big corps using the cheap money to buy back shares.

I do agree with you about MMT (Magic Money Tree) in that it makes no sense. Proponents of MMT say there won’t be inflation because money is only printed in a low inflation environment (ie. like right now) and that the government would be responsible with its spending while falsely assuming the money would go directly to the social need in question (ie. national daycare).

#118 not 1st on 05.03.19 at 9:03 am

Why would anyone want socialism when trump is achieving full employment. Watch what happens when capitalism is unleashed.

https://www.cnbc.com/2019/05/03/nonfarm-payrolls-april-2019.html

#119 Tater on 05.03.19 at 9:14 am

#87 Ace Goodheart on 05.02.19 at 9:55 pm
MMT is just communism.

There is nothing more to this.

It’s sad that a generation of North Americans have somehow been driven to communism.

However, they’re millenials, so it doesn’t really matter.

The generation coming after them is better.

Just flush the toilet and move on….
—————————————————————
Can you describe the mechanism by which the means of production come to be owned by the government under MMT?

#120 young & foolish on 05.03.19 at 9:21 am

This has to be one of the best blog posts EVER!

“Millions of people seek political and economic options to a system they think has failed modern expectations.” — GT

This is key. Those “modern expectations” are higher than ever, and demonizing the elites for failure to deliver is an old and well worn meme. What is there to stop this train? I am afraid Dalio will be proven right. Maybe waiting in long lines for basics will restore some humility and self-restraint?

#121 IHCTD9 on 05.03.19 at 9:26 am

#99 Millennial Realist on 05.02.19 at 11:20 pm
We are taking over, Garth. Deal with it.

Millennials now dominate the electorate. And the short-sighted self-interested greed of Boomers has given us little choice but to consider radical changes.

By the way, Garth, Millennials now also control our language:

So, henceforth, the term “Moister” shall refer to foul-smelling, diaper-wearing Boomers in need of a change of undergarment.

So Boomer Moisters, run along and get yourself dry and fresh!

Be part of the change.

Or be run over by it.
____

Dude, I heat to break it to you, but your views are a very thin slice of the millennial pie.

#122 David on 05.03.19 at 9:39 am

The definition of insanity is trying the same thing over and over again and expecting a different result. Socialism fails every time, no matter what name or banner it goes under.

As a father of two teenage boys, I can tell you that they and their friends view the Millennials as pathetic losers. So there is hope.

#123 not 1st on 05.03.19 at 9:43 am

Sorry MR, your inflated self importance wont stop the adults from taking back the country. Your experiment is over.

http://angusreid.org/federal-politics-may-2019/

#124 IHCTD9 on 05.03.19 at 9:55 am

#39 TurnerNation on 05.02.19 at 6:37 pm

#187 IHCTD9 it’s already here , in the big cities.
___

I see it out here too. Just in a different way. Especially among Men – it seems we’re chucking the reins aside, dismounting, and heading for the nearest saloon.

The ideas being pushed in the West today kill strength and Unity, that’s why the results are so obvious in Men IMHO.

How can the West stand if it’s divided against itself?

#125 Howard on 05.03.19 at 9:59 am

#115 Tater on 05.03.19 at 8:38 am

How does the US default on USD denominated debt, when they can simply print more USD?

————————————-

See that’s why I don’t get.

If the Fed simply prints a few quadrillion $$, it’s not “debt”. Who is the holder of the debt? The digital algorithm that created the money?

So aside from inflation (which the Fed will still claim is low regardless how high property rises), what are the consequences of this policy? There don’t seem to be any. Trump has made it clear he doesn’t care how he leaves the country as long as nothing bad happens under his watch. He will be only too happy to drop plane loads of funny money over flyover country.

What a bloody messed up world we live in, nothing makes sense, and yes we all know which generation made it this way.

#126 Howard on 05.03.19 at 10:12 am

#122 not 1st on 05.03.19 at 9:43 am
Sorry MR, your inflated self importance wont stop the adults from taking back the country. Your experiment is over.

http://angusreid.org/federal-politics-may-2019/

————————————–

CPC 38%
Lib 25%

Bloody brilliant!

Just hope the CPC aren’t peaking too soon – very real danger of that.

#127 millmech on 05.03.19 at 10:22 am

#99
Not to worry, your generation will most likely expire at a young age in an intersection after crossing against the light while reading your newest version of the magic eight ball.
Funniest is watching the Millenials pushing kids on swings out of synch because they are too engrossed by their phone to actually care.

#128 MF on 05.03.19 at 10:23 am

#122 not 1st on 05.03.19 at

Don’t feed the troll.

Remember the most radical of any demographic are the loudest.

Can’t you see that that comment was meant to upset you. Trolling 101. Ignore.

MF

#129 Ace Goodheart on 05.03.19 at 10:31 am

Interesting responses.

I’m always surprised by the millenial mantra and I even at one point questioned its existence.

But you can find clear evidence for it with a simple Google search (two of Garth’s own prodigies even have their own web site where they state it over and over again).

In a nutshell they believe that life is too hard for them because they have to work for stuff and work is tough. They add to that, they feel their jobs are not secure and their employers don’t really care about them.

It’s the toddler leaving the crib theory. The rest of the house is a cold, hard place, you might have to cry a bit before mommy knows you’re hungry and you might have to crawl somewhere to get something.

Life out of the crib is tough.

#130 Hatim Salih on 05.03.19 at 10:31 am

I doubt AOC, or anyone else for that matter, is stupid enough to think that you can just print more money to fund spending. You can dislike socialist ideas all you want but do so on their merits (or lack thereof) rather than inventing some crazy, scare-tactic pitfalls.

In case you’re wondering, socialists think the solution is to tax the rich and corporations more. The problem is at what point does that depress economic activity by driving away investment? That’s not to say I believe in trickle down economics either. The rich do not necessarily spend their tax savings; they don’t have to. Unlike tax breaks to those with limited disposable income, which ends up being pumped right back into the economy.

There are also other issues with tax avoidance tactics available to richer individuals and the fact that you can only raise so much from a small proportion of the population.

The trick is finding a decent middle ground were you get enough revenue to fund efficiently delivered public services (yeah, right!) without scaring away capital.

#131 Ronaldo on 05.03.19 at 10:41 am

#126 millmech on 05.03.19 at 10:22 am
#99
Not to worry, your generation will most likely expire at a young age in an intersection after crossing against the light while reading your newest version of the magic eight ball.
Funniest is watching the Millenials pushing kids on swings out of synch because they are too engrossed by their phone to actually care.
————————————————————–
Funny but true. If the power goes out, they are totally screwed. Never learned how to live without it. Would not survive. Totally clueless generation.

#132 Remembrancer on 05.03.19 at 10:56 am

#95 SunShowers on 05.02.19 at 10:57 pm
#50 Remembrancer on 05.02.19 at 7:07 pm
Why punish accumulating assets and not spending every last dime in your pocket as soon as you get it from that hard work and enterprise (which was already taxed)?

———————————————-

Because accumulating assets doesn’t keep the economy going. Consumption (spending) does.
———————–
Jeez, so investing in a company (an asset) is not contributing to the economy – hint, maybe that biotech uses the extra cash to develop a cure for cancer – the value of that asset is now certainly more than your longboard to society… Oh, you mean consumer economy – nice treadmill you’re running on…

#133 thebarold on 05.03.19 at 11:04 am

Putting monetary supply even further into the hands of politicians is the absolute wrong outcome. Short horizons frame, self interest over the greater good would result in even more wasted public funds. Why bother taxing any more? Just print the money and the inflation becomes the ultimate tax on the wealthy. Even I would consider bitcoin if we go further down this route.

#134 Damifino on 05.03.19 at 11:09 am

#121 David

The definition of insanity is trying the same thing over and over again and expecting a different result. Socialism fails every time, no matter what name or banner it goes under.
—————————————-

In this case, it’s really the definition of historical blindness. Technically, you can’t ‘repeat’ a behavior if you’re blissfully unaware of its previous failings.

I strongly suggest shutting off the iPhone, backing away from the social media echo and making a trip to one’s local library. There’s people there who can help.

#135 IHCTD9 on 05.03.19 at 11:21 am

#129 Hatim Salih on 05.03.19 at 10:31 am

I doubt AOC, or anyone else for that matter, is stupid enough to think that you can just print more money to fund spending.
___

The first rule when it comes to Socialists and Commies is: when they tell you what they’re all about – you believe them.

#136 Doug in London on 05.03.19 at 11:21 am

Whatever was wrong with Keynesian economics? As the economy gets better and inflation picks up, interest rates should go up and government stimulus (financed with deficits) should be withdrawn. Correct me if I’m wrong, but doesn’t that describe where we are now in 2019?

I just spent 2 days in the inner city of Toronto and was rarely out of sight of construction of new apartments and office buildings, and saw the vacancy rate is practically zero. Not only that but the cost of homes and office space to rent or buy are quite high. Closer to home, I see a lot of construction going on here in London and house prices have gone up a lot in London, St. Thomas, Strathroy, and other towns and cities around the region. I stopped for some gas at an On Route station rear Kitchener and the price was $1.36 per litre. I filled up here in London at the “cheaper” price of $1.26. Again, correct me if I’m wrong, but doesn’t what I’ve seen qualify as inflation and warrant a traditional Keynesian increase in interest rates?

I’ve seen a lot of comments about how great the Trump Administration’s tax cuts are. Again correct me if I’m wrong but during a booming economy, already at full capacity, instead of running a deficit to pay for tax cuts shouldn’t the government be trying to run surpluses and build up the treasury and thus reduce the debt? Isn’t that the idea behind Keynesian economics?

#137 Neonelements on 05.03.19 at 11:22 am

A friend and I were having a discussion the other day about some of the monetary polies we have been seeing lately and the topic of Ducktales came up. (We are gen X)

In the original Ducktales there is an episode ( Dough ray me) that explains the problems of inflation and just printing money in a simple to understand way.

That episode and the Scrooge Mcduck and money cartoon short (1967) got me interested in personal finance and taught me more than my parents or school ever did about money. (Which is sad)

So if you know someone who is ignorant on basic monetary polices just refer them to those cartoons. After all they’ll probably be more likely to listen to Scrooge Mcduck than some highly educated financial adviser. (Which is even sadder)

#138 Red falcon on 05.03.19 at 11:25 am

Politicians and Promises both start with P, but everything else is not the same! This will not end well.

#139 Russ on 05.03.19 at 11:28 am

Hatim Salih on 05.03.19 at 10:31 am

In case you’re wondering, socialists think the solution is to tax the rich and corporations more.

The problem is at what point does that depress economic activity by driving away investment? That’s not to say I believe in trickle down economics either. The rich do not necessarily spend their tax savings; they don’t have to. Unlike tax breaks to those with limited disposable income, which ends up being pumped right back into the economy…

===============================================

You nailed it, Hatim.

No socialist government recognize they have a spending problem. Every one of them believe it as a revenue problem.

Our governments are probably the most inefficient corporate-type entities out there. It is ludicrous to believe a solution can be found effectively by putting more money into the hands of bureaucrats.

The carbon tax is a classic example, as a tax on CO2 it goes into general revenue which gets spent inefficiently on more government rolling stock, people & buildings. All contributing to an increase in CO2 emissions.

At least the plants and trees love it.

#140 not 1st on 05.03.19 at 11:28 am

#127 MF on 05.03.19 at 10:23 am

—–

Whats to be upset about. I have known a populist wave was going to undue this socialist stupidity long ago. Your trigger will happen on Oct 19 when we find a new job for Trudeau that he is qualified for.

#141 Ubul on 05.03.19 at 11:29 am

#129 Hatim Salih on 05.03.19 at 10:31 am

I doubt AOC, or anyone else for that matter, is stupid enough to think that you can just print more money to fund spending.

Stupidity has no limit.

It is worth noticing though, that the idea that “you can just print more money to fund spending” can only arise in a system where “you can just print money”.

If the underlying “printing money” did not exist, the “printing just more money to fund spending” could not even cross any stupid mind.

Try to say create more gold or create more bitcoin to fund more spending. The stupidity of it would be obvious.

#142 Robert Ash on 05.03.19 at 11:51 am

I have to agree with # 24 Catalyst.. also # 29, there is a radical difference in our Leaders, and their socialization, and that has translated into a lot of problems, for the Western Countries… One issue that is obvious to me, after living in Asia, is the simple commitment to Work… almost all Asian countries work 6 days, per week…. Globalization while a nice Theory on the Drawing board, in the Uni Classroom, missed the unintended consequences of Competing with folks, much poorer, and that really want to work to succeed… Kind of like the Western outlook of 50 years ago… and with MMT, we will further our inability to compete, and then just…. the Sell out Phase, which is already happening in many Developed countries, and Impoverished countries, which don’t have organized and aggressive work forces, making things, that folks, want to purchase… Just the same mind numbing comments, like those great Green Eco Jobs, of the Future..Developed countries are in denial… .We are watching the meltdown… we have too much overhead… we really desperately need Accountants to run the show, for the foreseeable future…

#143 Shake a Fist for Freedom on 05.03.19 at 12:00 pm

Some forget that Keynes was laughed out of economic circles in his time. It was only post WW2 when governments discovered his free money policy was a great way to create wealth for a budding civil service union movement that voted with the breeze that Keynesian nonsense was resurrected. Let’s not forget that the reason Keynes was bounced was that he left out what happened after his incremental 2% targets lastly accumulated to 100%. After 50 years his models fall off a cliff, hence the laughter and humiliation. Well, effectively, we’re there now. 100% taxation means that inevitably confiscation must follow, Hello Venezuela. Keynesian economics is for naive fools and the greedy graspers who benefit from such naivety. Trudeau and his Globalist backers are Keynesian, why, because stealing is easier than the shock troops we see haunting the streets of every other socialist mistake.

#144 Rifles on 05.03.19 at 12:03 pm

As disturbing as AOC and her flock may be, it is important to have a discussion about alternatives to the existing system. Yes, she is a fruit loop, but having her ideas out in the open where they can be refuted, debated and ultimately relegated to the cess pool of non-viable ideas is part of the process of building a better society

#145 Ubul on 05.03.19 at 12:30 pm

AOC is a financial populist.

#146 YesMum on 05.03.19 at 12:40 pm

never underestimate a woman scorned. the wicked witch Wynne looks like a nun beside AOC. Feminism is spawning to a whole new form of scary.

#147 fancy_pants on 05.03.19 at 12:43 pm

#7 Mean Gene on 05.02.19 at 4:56 pm

true, what I’ve been saying for years is socialism ensures everyone finds the bottom of the barrel

#148 Crazyfox on 05.03.19 at 12:55 pm

#116 Remembrancer on 05.03.19 at 8:46 am

Well said. No need to add, you’ve captured it. I’m a traditionalist, would have used the old T crazy Jew version of easily led followers chipping in Gold and melting it down into a golden calf to worship on and how that ended well for them but your modern version of social media cashing in by telling us what we want to hear through knowing our past online history oh so well thanks to big brother, that sums it up nicely as well.

There is nothing like internet yes entities telling us what we want to hear. Who doesn’t want that right? It doesn’t have to be real, everyone still gets what they want. Of course self worship will end well. Just define “the end” however we wish it to be and it will always have a happy ending. All we have to do, is pretend. Oh, its not real… but does it have to be? Of course not. Alt news, facts, causal effects, why let a little thing like reality get in the way, when we can all just pretend.

We don’t have to suffer like McMurphy below, just get some Serotonin scripts or unfentinalized street Molly and we are well on our way! It doesn’t have to be this hard… just take the scripts and pretend. :)

https://www.youtube.com/watch?v=yQa_sg4zN88
https://www.youtube.com/watch?v=NVPdZBQm38M

#149 Adrian on 05.03.19 at 1:05 pm

Professor Steve Keen explains why ongoing, modest deficits are actually necessary for the proper functioning of Capitalist economies. The USA has run almost continuous deficits averaging over 2% of GDP for the past ~120 years. Excluding the World Wars it’s a couple decimal points smaller, but still averages over 2% of GDP.

Milton Friedman thought the equation for the monetary roots of inflation was Y*P = M*V, but that’s incomplete. Because banks create deposit money when they create loans, Friedman’s equation needs to include gross financial transactions. That means including the flow of private Credit, which is the single most volatile component of aggregate demand. (Credit is a flow measuring the year-over-year change in Debt stock.) Professor Steve Keen explains at around 15 minutes into the following lecture, available on YouTube:

‘Keen Berlin 2019 Reality Vs Myth’
https://youtu.be/auSh9f8krts

#150 Message for Millennial Realist on 05.03.19 at 1:07 pm

I’m the earliest of the boomers. I’ve been retired for 20 years, I don’t smell and I don’t wear diapers. Son, I don’t think you could keep up to me now, let alone run me over.
Next time you’re on the highway and a fast moving German import blows by, give a wave, it’s probably me.

#151 MF on 05.03.19 at 1:14 pm

139 not 1st on 05.03.19 at 11:28 am

My trigger?

You must be new here.

MF

#152 JB on 05.03.19 at 1:16 pm

Tried the bitcoin thing, what a way to get rich or severely burned. I still have the scars. Never again diverisfied and steady looking for long term returns, I’m not 25 and I’m not 75 so I have some time to earn $$.

#153 JB on 05.03.19 at 1:19 pm

#193 Smoking Man on 05.02.19 at 3:52 pm
JB on 05.02.19 at 9:15 am
#121 Smoking Man on 05.02.19 at 1:49 am
Why I ran away from Canada.
DM was groving at Davos and I called him up on it.
The sooner he reads my book the longer he will have a job.
But I’m still unforgiven. Dont want to be. Free speech is everything
https://youtu.be/mTwjUE60HG4
…………………………………………………………………..
Your hyperarousal response to leaving Canada was if I recall due to a lack of a job and losing your home!
….
That was just James making up stories. I sold at peak real estate. You see 10 years worth of price growth in 2 months it was a no brainers to sell.
Always said on here when my dad passed away I was out of here. Now I make double and in USD what I would make in Canada and pay a fraction of the taxes.
…………………………………………………………………….

#30 Smoking Man on 04.30.17 at 8:31 pm

#18 All out panic on 04.30.17 at 7:42 pm
Realtors, mortgage brokers, greaterfools and sellers are in an all out panic. Mortgage fraud is now main stream and RE appreciation is finished and is now on a decline. A pause or decline = game over. People trying to sell with NO BUYERS. Buyers backing out of deal. Depositors pulling money out. Lenders becoming the subprime borrower (home capital 15-22% loan). The house of cards is falling apart.

Your insane laughing con. Only reason I’m selling is to buy a huge house. We are opening up a rehab center. How ironic.
My son who will run it knows my routine. Rule is I have to be off the property by 8pm.
He knows that Dr Smoking only comes out after 9pm.
Huge grouth industry. Phentonal kills and if you love your kid you will pay anything. You either get off it or you die.
Son being a former oxy addict who was saved by one of these places. Big thank you to Jim McKenney.
He went and got certified. He’s got the best track record for curing addiction in Canada. Why would I not put the house money to good use. Save some lives and make some loot.
I’m proud of him.
He’s come along way since that cell call standing on top of a bridge. Desperate and afraid. What we went through that night, I don’t even wish that on James.
………………………………………………………………….
#53 Smoking Man on 04.30.17 at 9:39 pm
Ok started early tonight.
Bay street wants me to take the stir stick out of my mouth while preforming myracals on the trade floor. They want me Stop salivating at big bobos in a low cut top.
They want me to wear a pink shirt on pick shirt day.
They want me to swallow climate change inspite of record population growth in polar bars.
They want me cut my rate down from 150 per hour to 85 wag my tail and settled for a head pat. They want me to diverse and keep my mouth shut about Saudi Arbia being on the woman human race councel.
Fk em.
My plan J rocks.
Enjoy your TFW. It was a lot easier screaming out JS now you have 25 sylibal names to deal with who are going to destroy my sheets.
But I’m not coming back a fourth time to help you suck up heathens.
Now let’s find an old western where real men don’t wear dresses.
…………………………………………………………….
Sure Smoking Man sure, we all know you lost your job first by pissing off someone at RBC capitol markets, couldn’t get a HELOC from the bank to extend your home payments, your pickup truck died & was impounded off the street and then you were investing in your Smart sons rehab business venture once you sold. What do you think we are stupid? Its all here buddy.

#154 oh bouy on 05.03.19 at 1:25 pm

@#121 David on 05.03.19 at 9:39 am
The definition of insanity is trying the same thing over and over again and expecting a different result. Socialism fails every time, no matter what name or banner it goes under.

As a father of two teenage boys, I can tell you that they and their friends view the Millennials as pathetic losers. So there is hope.
________________________________

LOL, sounds like you’re raising some quality humans there david. sigh.

#155 Exurban on 05.03.19 at 1:40 pm

#136 Neonelements

Scrooge McDuck was a great fiscal conservative. You are probably thinking of this one:

Tralla La

#156 Eks dee Siple on 05.03.19 at 1:57 pm

Looks like another of my ideas being hijacked by the elite to create a target. Christening it as “MMT” from some obscure textbook, eh? No, it is simply a world without financial parasites.

And no Alistair Mac, creating money out of thin air for everyone rather than just the commercial banks who get first dibs, was the answer all along. How do you distinguish between “assets” and “everything”. Please explain.

Binky dinky, I think you mean, “Who will do my work for me?” Answer: Do your own damn work or hire someone to do it without one of these four things: Harming, Exploiting, Killing, and Disinforming. This is what your economy runs on now, and that is why it is failing.

No need for the Commie Boogeyman.

#157 Remembrancer on 05.03.19 at 2:18 pm

#102 IHCTD9 on 05.02.19 at 11:56 pm
#81 Remembrancer on 05.02.19 at 9:42 pm
#69 Eco Capitalist on 05.02.19 at 8:24 pm

The moment we adopt MMT I’m becoming a prepper.
——————————————————–
Dude, that’s literally the opposite of what prepper means
——-

I think what Eco is saying is that the minute we adopt MMT, the economy, financial system, and currency is guaranteed burnt toast, so it’s time to start loading up on ammo and freeze dried food.
————————————————–
Have it your way and maybe too pedantic on use of tense, but in my mind, if you’re loading up when the SHTF , its too late – you’re not a prepper…

#158 jess on 05.03.19 at 2:22 pm

using taxes to fight inflation is a mischaracterization

https://www.cnbc.com/video/2019/03/01/stephanie-kelton-explains-modern-monetary-theory.html

==

Court Authorizes Service of John Doe Summonses Seeking Information About Finnish Residents Using Bank of America, Charles Schwab, and TD Bank Payment Cards Linked to Non-Finnish Bank Accounts
Wednesday, May 1, 2019

https://www.justice.gov/opa/pr/court-authorizes-service-john-doe-summonses-seeking-information-about-finnish-residents-using

#159 Sideshow Rob on 05.03.19 at 2:36 pm

Some day I would love to be able to see all Smoking Man’s previously deleted posts. That will never happen. But I bet there is some gold in there.

#160 jess on 05.03.19 at 2:40 pm

unethical practices and ‘toxic culture’ “cookie jar”

from http://retheauditors.com/2019/01/13/marketwatch-2018-stories-that-packed-a-punch/

—-adding back millions in “ghost revenue” — deferred revenue that accounting standards force them to write off after an acquisition — when calculating executive bonuses. Acquiring companies often assign a fair value to the deferred revenue added to their books when purchasing another company that are less than the amount reported on the acquired companies’ balance. Those write-downs are permanent, not timing differences, and are called “deferred revenue purchase accounting adjustments.” They are required by Generally Accepted Accounting Principles or GAAP.

The write-downs become “ghost revenues” for the acquiring company. Symantec and others are adding back the “ghost revenue” to GAAP revenue numbers to create adjusted revenue metrics that are reported to investors in the earnings release and via the conference call.

see Companies including Symantec are using ‘ghost revenue’ to calculate bonuses
https://www.marketwatch.com/story/companies-are-using-ghost-revenue-to-calculate-executive-bonuses-2017-11-06

https://www.blbglaw.com/cases/00335

A shareholder class action lawsuit has been filed as a result of my article and the whistleblowers cliams that alleges Symantec manipulated quarterly financial results to produce big payouts for top executives. The names Symantec along with CEO Greg Clark, CFO Nick Noviello and former accounting head Mark Garfield as defendants. Previously Blue Coat’s CEO, Clark, became CEO of Symantec after it bought Blue Coat in 2016. The suit alleges that Clark and Noviello brought “Blue Coat’s with them to Symantec.”

The indictment alleges that Scherr, McGraw and their co-conspirators defrauded insurance companies by causing them to exchange cash and other liquid, valuable assets for illiquid and fraudulently overvalued securities created by the defendants and their co-conspirators. As alleged in the indictment, Scherr, McGraw and their co-conspirators perpetrated the scheme, in part, by acquiring insurance companies and acting as an investment advisor for insurance companies, thereby gaining access to the management of the investment portfolios of victim insurance companies. Scherr, McGraw and their co-conspirators allegedly used Southport and affiliated entities to create fraudulently overvalued securities and replace assets held by victim insurance companies with these fraudulently overvalued and illiquid securities. The indictment further alleges that as a result of the scheme, victim insurance companies have collectively suffered hundreds of millions of dollars in losses.

https://www.justice.gov/opa/pr/two-men-charged-insurance-investment-fraud-scheme-caused-hundreds-millions-victim-losses

#161 Russ on 05.03.19 at 2:42 pm

Eks dee Siple on 05.03.19 at 1:57 pm

Binky dinky, I think you mean, “Who will do my work for me?” Answer: Do your own damn work or hire someone to do it without one of these four things: Harming, Exploiting, Killing, and Disinforming. This is what your economy runs on now, and that is why it is failing.

No need for the Commie Boogeyman.
==============================================

It’s easy to form a company that doesn’t engage in all 4 of the above sins.

But I wouldn’t be surprised if SNC-Lavilin got all four of your inclusive points.

#162 Alistair McLaughlin on 05.03.19 at 2:50 pm

#155 Eks How do you distinguish between “assets” and “everything”. Please explain.

Assets: Your house and stock/bond portfolio go up in price.

Everything: Everything bleeping thing goes up in price.

Really, was that unclear the first time?

#163 Ustabe on 05.03.19 at 3:14 pm

Fruit Loops are just Pride Cheerios, nothing to be afraid of.

Lots of opinion being tossed around as fact here today.

The entirety of the LGBTQ population represents something like 4% of the North American population.

So too the number of politicians who really are socialist or whatever has most of you frothing.

In both cases they are like the red cape used to taunt the bull. Big, strong bull. Remember what happens to the bull.

#164 Sovavia on 05.03.19 at 3:18 pm

For those who want to learn about MMT, try reading a book:

Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems, by L. Randall Wray.

#165 jess on 05.03.19 at 4:22 pm

How fair is Canada’s carbon tax?

Cars idle in traffic during rush hour in Toronto. Michael Gil, Wikimedia Commons
Opponents of the federal government’s carbon tax—like Doug Ford, Jason Kenney and other conservative premiers—may not have been happy to hear it, but analysis by the Parliamentary Budget Officer found that the large majority of households in the provinces affected will be better off, with most families paying less as a result of the carbon taxes than they receive from the federal “climate incentive payments”.
The independent agency found that all household income groups except the top 20% will be better off. Canadians for Tax Fairness and the CCPA have advocated for years for this type of progressive carbon tax, and we’re glad the federal government followed our advice.
However, the Liberal government’s carbon pricing plan goes light on large emitters—which the PBO report also confirms—and it will take much more than a tax on carbon to answer Canada’s urgent climate change problem and the complex economic questions surrounding it.
A great column in the Telegram this weekend points out that years of anti-tax sentiment hasn’t helped government sell its carbon pricing plan and a broader, bolder solution is required – one that includes voices from labour who have weathered these economic adaptations before.
====================

Taking the crunch out of tax time

Another tax deadline has come and gone, but in the remaining days for Canadians to file their taxes, C4TF squeezed in some good discussion about getting government to do our taxes for us. In an op-ed in the Winnipeg Sun, we point out that the CRA already has much of the information needed to provide citizens with a draft tax return. While H&R Block, TurboTax and others from the profitable and hard-lobbying tax preparation industry might not be thrilled, draft filing would help ensure our most vulnerable receive all the benefits they’re entitled to.
C4TF director Toby Sanger explores these ideas further in an interview with Global News’ 680 CJOB morning talk show. He points to other regions such as Norway and California that have successfully adopted the voluntary system and the significant time and cost savings if Canada were to get on board.

#166 jess on 05.03.19 at 4:39 pm

kenny wants to separate?
Sanger added that Husky Energy, “one of the most profitable oil and gas companies in Alberta,” is owned and controlled through “companies based in Luxembourg.”
https://pressprogress.ca/corporate-canadas-pile-of-cash-in-offshore-tax-havens-has-hit-353-billion-for-the-first-time-in-history/

#167 Iconoclast on 05.03.19 at 4:51 pm

MMT is just a theory to validate the unlimited spending that western governments have been doing anyway.

They used to be tentative and cautious about running deficits.

But nothing bad happened, really. So they’ve gotten more bold. More deficits, more debt. And still nothing bad happened. Then 2008 happened. And amazingly, it was ‘fixed’ with more debt.

MMT means the brakes are off completely. So until something bad happens, it’s to the moon, Alice, to the moon.

What would be bad?

Something would have to happen to cause China or oil producers to demand payment in something other than USD (or CDN or EUR).

Or some pissant little country like Greece or Italy ups and defaults completely. That could trigger contagion. But the numbers are so large, so unimaginably large, the only solution is a new currency.

#168 Y. Knott on 05.03.19 at 7:39 pm

#24 Catalyst on 05.02.19 at 5:49 pm

Let’s be honest, we haven’t had Keynesian economics either.

Requiem for a monetary theory; as expressed during the Depression by democrat Harold Ickes, “We’ll tax and tax, spend and spend, and elect and elect.”

Keynes, greatly simplified, says “the government borrows money and hands it out to support the economy during bad times, then taxes it back during good times to pay-off the debt.” This is as it must be under the British parliamentary system, because the government is not allowed to save for a rainy day; if there’s money left after the budget year, they’re taxing too much.

But under the democratic system known as “Vote for ME!!! – I’ll give you even MORE, for even LESS!” – also known as ‘bribing the voters with their own money’, no politician takes naturally to fiscal prudence; if he tries to, his defeat in the next election is virtually guaranteed. It gets worse under lefty-socialist emphasis, and especially when a government-‘owned’ press (I’m looking at you, BBC and CBC) frequently benefits from taxpayers’ largesse, and loves fiscal laxity as it’ll benefit more.

“Well, we’ll borrow a little more this year – we’ll keep it under $19 billion – but we’ll balance the budget FOR SURE next year, we really really will!” How many times, under how many different federal governments, have we heard ~that? – I’ve lost count…

#169 Musty Basement Dweller on 05.03.19 at 10:44 pm

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