So, here we have another fine example of MB delusions being shattered on the jagged rocks of EZFKA REALITY.
With the money-printing fairy granting Davo pretty much everything that he had asked for, he is beginning to appreciate the disaster that this will unleash. He does his “woe is me” routine:
I have campaigned for MMT in the full knowledge of the dangers of political misappropriation. But I did not think that it would present itself quite so quickly!It seemed more likely that it would take a full cycle for pollies to catch on to this newfound honey pot to buy influence.
I had hoped that MMT would be deployed in constructive outcomes such as human and hard infrastructure (such as it is being under the Biden administration).
But we have the worst, most corrupt and least accountable politicians in the developed world. So it should not really be a surprise
(https://www.macrobusiness.com.au/2021/05/australia-on-track-to-become-pin-up-boy-of-mmt-failure/)
well, gee, you sure are acting quite surprised in response to something that “should not really be a surprise”!
How bloody long does it take someone to realise that the real issue was never lack of money, tax settings, productivity, or whatever. So nothing can possibly be changed by adding money, changing tax settings, improving productivity, whatever.
to wit:
(https://www.macrobusiness.com.au/2020/04/let-landlords-burn/#comment-3785900)
The underlying issue has always been a confluence of power structures, vested interests and culture and customs. Without a change in that, it was always pretty much 100% guaranteed that lower taxes, more money (whether credit or MMT), improved productivity, whatever would always be captured to reinforce the status quo and everything that Davo rails against.
I guess you can’t fix stubborn?
so look forward to more “solutions” from MBblokes that turn out differently to how they imagine. Should be fun. As always.
WHOCOODANODE???!!!!
Yeah – I spilt my tea when I read that article too.
https://www.macrobusiness.com.au/2021/05/australia-on-track-to-become-pin-up-boy-of-mmt-failure/#comment-4115398
All MMT will be used for is to preserve the status quo.
Long may EZFKA reign.
No surprises there. There has been a fierce determination on the part of some to clutch for any solution that does NOT involve any reform of the broken and corrupt 19th century banker centred model of public money.
MMT is just the latest version of that.
Until folks suck it up and accept that model is broken and is NOT capable of durable reform we will continue to have these pointless deck chair moving exercises.
End the banker monopoly of the RBA and start the process of reform.
This is true.
But I also feel that the reform of banker centred model of public money, by itself, could also be just another thing that is subverted and made to reinforce the status quo, easily enough.
Perhaps you’d give the bank shareholders a bit of a haircut (probably mostly the retail bag holders), but financial power will just assert itself in a slightly different way.
what do you think?
Hi pfh 007,
Good to see you here.
I have an issue with (central) banks as in when you look at their history they are what I can only call parasitical leeches on the countries they operate in.
The reality seems to be that we don’t need central banks and a government can create their own currency.
This was done by Lincoln when he issued greenbacks.
Hitler did the same. Both were issued at no interest and it seemed to have worked very well for everyone involved (except for the banksters that didn’t get their cut).
Apparently when WWII ended Germany had no debt.
JFK was working on something similar.
As of yet I still have to look into this further but have you maybe stumbled on this and if so what is your opinion?
“For every Mark issued, we required the equivalent of a Mark’s worth of work done, or goods produced.”
Proof of Work existed in currencies before the blockchain. Banking elites didn’t like it then and they don’t like it now.
“For every Mark issued, we required the equivalent of a Mark’s worth of work done, or goods produced.”
That’s it! That’s how Germany backed its currency.
I forgot about that as I had found this a while ago and hadn’t had the time yet to research it further.
I find this topic very interesting as I think it is one of the most fundamental issues you should ponder when thinking about what kind of society you want. So much flows from how you run your monetary policies. A lot of society’s ills can be traced to how and on what basis currency is created, and who is ultimately in control of this enormous power.
If we solve this issue a lot of problems we see today would simply disappear.
All that statement says is it won’t pay any welfare. If every piece of work done created new currency to it’s value then you would hyperinflate very quickly.
Germany was one of the first countries with a welfare system and after the Weimar disaster there was no hyperinflation.
Not because of any nanny statement like the above though.
Every dollar spent is on a dollars worth of goods or work…
How then?
I’ve only done the most basic research so don’t know the finer points yet.
I agree the current model of central banking is a problem as it was really intended to support a private bank dominated system but I think there is a sensible role for a central bank and a central bank balance sheet that is separate from government. It would effectively be similar to the Lincoln greenback approach which would have been run by treasury. Whether a central bank is part of treasury or separate doesn’t really matter but I think it is easier to expose political pork if it is separate.
Thank you for the input.
I think you can safely say that the system we have now isn’t working as well as it could for most people involved. But it has been copied throughout the world and accepted almost as a fait accompli where no alternatives are even considered. But if you look at history there are many periods where countries flourished under a different monetary system. I find that interesting as the past might supply answers to how to fix the current predicament we’re in. Or maybe it can’t be fixed and we need a fresh start al together.
theoretically it can very easily be fixed. Everyone knows what the solutions are.
But in practice, the dynamics of vested interests, wealth, power, class, etc, pretty much guarantee that it can’t. That’s what the EZFKA is about.
(https://www.ezfka.com/about/)
That is true.
Again if you look at history humanities plight seems to be to go from boom to bust where the insiders always end up with the most chips, no matter which brand the casino operates under.
Thanks for pointing out the EZFKA ‘about’ page.
EZFKA is about recognising that one has to be a pragmatist to understand current and future government/economic/monetary/fiscal policy.
Also true.
Oh Peachy! Things do change and I don’t think it would take much to fire up the punters and non banks to demand access to RBA accounts. It is already happening with fin tech and the payment platforms who are increasingly pissed off with being forced to use banks to settle their transactions. It only takes a few of them to cotton to the fact that the general public would probably support a campaign by them for open access to RBA deposit accounts.
Lets assume for a moment that you’re right and it’s possible to fire up the punters.
What’s your sell? How do you get me fired up?
I’m a single mum working as a secretary with my 3yo in childcare 3 days a week, struggling to make rent & stay sane.
Or a warehouse worker married to nurse, 5 years into the mortgage & wondering if it’s better to have a kid or save some money to buy an IP in a few years.
Or a reasonably well-to-do accountant with a house in a middle ring suburb, 2 kids in primary school and a wife running a business from home (selling hampers).
How do you get my attention and get me interested at all? If you manage to catch attention, how do you persuade me, even for a second, that my real problem isn’t all the shit I deal with every day but that it’s that I can’t own a central bank liability?
Seems incredible to me.
Seems incredible that you think they are the “early adopters”.
All that the crowd you have described need to know is that they are denied something that the banks get. They don’t need to want one. They just need to get the shits they can’t have one.
As for who would be the early adopters?
There are a few people who are not fans of banks and a bunch of businesses who want access to risk free and highly liquid assets.
Once they have tested and proved the systems the next step is straight forward. Pull the deposit guarantee on bank accounts as it is now redundant.
Then shout fire.
I’m not talking about early adopters and I didn’t think you were.
I thought you were saying that there needed to be political pressure to grant people access to central bank accounts. and I was having trouble imagining how that could come about.
but you envisage some kind of model where some kids get central bank accounts as part of a beta test to see if it works and then the other kids get jealous and scream for the same?
That rather presupposes that the hard bit (ie prying open access to central bank for non-cartel-members) has somehow already been done.
isn’t that cheating? 😉
“..All that the crowd you have described need to know is that they are denied something that the banks get. They don’t need to want one. They just need to get the shits they can’t have one…”
That is the political support for creating access. Folks don’t like banks and they will hate the privilege once they know about it.
The majority of Australians voted yes to SSM but I doubt that issue was of direct relevance to many considering the single figure incidence of the love that speaks its name now quite loudly.
Fintechs and corporates are most likely to drive it as The Economist noted this week.
I don’t think we’re talking about the same thing.
i accept that people hate banks and would hate any banking privilege. But no regular person is going to be able to make a connection between all that, deposits at the central bank and the real world (where babies have to be born amd IPs have to be bought).
Its a topic of discourse that is about as esoteric as debates about how many angels can dance on the head of a pin… maybe our eternal salvation DOES depend on this, but most people aren’t interested & don’t see how.
which is why I ask – what’s the sell? How do you get people interested? What’s the threat? Or the carrot just out of reach (CAREOT and JUST out of reach mind, not something loosely defined, that might be a decade away, maybe).
I reckon it can’t be sold to the commoners.
Your “sold to the commoners” seems to involve selling it to every single person. That is not necessary.
A coalition of business with an interest in accessing CB accounts directly and some noisy chattering class folk who understand the connection between debt / asset price bubbles and the monopoly and the current mess is enough.
Running the banker privilege line will be enough to obtain sufficient wider support that eventually the pollies will do it. Especially when change starts happening offshore. Which is already happening.
At the moment the main problem is that our chattering class is hopeless when it comes to understanding how the monetary system works.
It is as though they still belief typhoid is a miasma problem.
I guess this comes down to whether it becomes a political issue at all this it needing to be “sold” to the masses as something that needs fixing. Or whether it becomes a battle of capitalism lobby groups, the incumbents being the ABA and the challenger being some technology partnership of various businesses.
Kind of like the great Uber versus Cabcharge war of 2014-2018 which never really became political, yet led to sweeping disruption and legal change.
I read that sentence and took it literally at first, thinking ‘How the fuck does she manage to do all that and all of EZFKA while trolling MB?’
Well, it’s not entirely autobiographical.
but I am working on getting Malcolm Turnbull to write a piece for ezfka.com
Chutzpah is of the scale!!
ROFLMAO
Love it. Almost inspires me to set up a Twitter account!
You can read Twitter posts without having an account.
Go to your search engine, type in @peachy_posts and away you go.
if I’m not mistaken, central banks were initially setup to fund wars… at least I think that was with the BOE, and certainly the Bank of France (a la Napoleon).
I know you replied to pfh 007 so sorry to butt in.
If you’re interested in a history of central banking you could watch
‘The Money Masters’ from Bill Still.
It takes you from biblical times to the present.
Unfortunately the quality is quite bad, I think it’s from an old VHS, and about 3.5 hours long.
https://www.youtube.com/watch?v=jkKwcXSbDK4
Highly recommended.
They certainly did that and in a way that gave bankers a front row seat at the trough.
It would be scary having this guy driving investment strategy for your life savings. Fuck me.
None of his assumptions ever take into account human nature.
Or even past experience, it’s not like politicians have never done a cash splash before.
Yet he assumes politicians will act in some ethical manner sticking to playing within the “rules” just because…
its a really long bow, not least because “the rules” aren’t even written anywhere. They exist only in imagination (perhaps largely as a unconscious heuristic based on a projection of past events?)
I think you’re spot on Peach. Just because the bears think something should happen based on what they deem as moral and fair. Doesn’t mean politicians and elites will share the same morals *sniggers* It’s the very reason bcn et al. will be wrong again while Nathan Birch is on his way to being a billionaire.
Yep.
it galls those dudes to no end that Nathan Birch is heaps richer than them. Basically because he is smarter.
I love it.
I actually think he’s as thick as a brick which is how he initially pulled things off with dumb luck. EZFKA is set up to reward those that take the biggest risks and Birch is a fantastic example.
Bloke has probably not read a dozen books in his life. And understood fewer.
but he was smart enough to see how money is made & to take the asymmetric risks involved
agree with all your remarks.
it’s easy to think you’re smart by predicting crashes all the time, trying to see the cracks in the system.
You are wrong. A few years ago when MB started insulting him, calling him Mr IQ, etc, I was curious too see if he was really that dumb. I watched a few of his videos and noted:
1) Birch has always been positively geared and warns his followers that being negatively geared is a sign of excess leverage.
2) He has a very deep understanding of the value of properties in specific areas, how much they would cost to renovate, how much they would be worth after renovating.
My only gripe with him is the way he convinces his followers to buy in specific new developments where he takes a commission… oh and his smugness. I would love to belt him.
Here is his site. He seems to have moved on from selling new developments.
Binvested – Australia’s Most Successful Property Investment Firm
Perhaps I wouldn’t conflate streetwise with smart.
Nathan may have rode the wave better than most, the wave found him, not the other way.
The “rules” were written under a different cultural paradigm, where things like sound money meant something and where it was morally reprehensible to seek to preserve enslaving debts. So many of today’s commentators, don’t understand that to our new cultural overlords, money is imbue with magical powers and that the easiest way to enslave someone is through debt.
I think I finally realised around 2008/10 that they were never going to allow things to fail, because that would cause the walls of our debt prisons to also fail. With that knowledge I loaded up on debt and bought a house shortly after. Better late than never I suppose.
… aaaaand we get back to the issue many of us have had with MB!
My issue was that people were not allowed to say “shit” and “fuck”. And sometimes that’s what you need to say.
It is the simple things that add up.
chortle
Then don’t say it.
You could say sheet and fluck, or…
I’d need to be a lot more couth for that.
I can’t be consistently couth! It’s a character flaw!
It’s just a discipline, no sophistication.
It seriously annoys amoeba sized brains which releases dopamine so natural addiction develops.
And then the spam bot censors those things too….
I knew they’d never let it happen but I live in Perth. The prohesy came true here. 6 years of falling house prices. I bought in December 2020 and I’m pretty sure I picked the bottom. The federal government governs for NSW and VIC. The immigration policy supports their hollow urban economies. Their increasingly bigger populations justifies their extraction of wealth from the mining states via gst, finance industry subsidy (super, centralisation in Sydney and Melbourne). Basically, the rest of Australia should boot them out.
yeah ..”rules”.. dls is a dope
fmd it’s a QE world and QE broke the “Rules”
Testing