But in fact, USDT and Binance are kicking while USDC and US Banks are starting to wobble. And it has to do with the irresponsibility of the central planners HERE in the USA (the Fed raising interest rates from 0.38% to 5% in a year!)
https://www.investing.com/news/cryptocurrency-news/binance-c...
Seriously, my theory is (different from the Austrians) that the Fed creates the problems and depressions mostly by raising interest rates. Instead, keep them at zero and let the market figure things out. I am fine with printing money as long as you raise taxes to remove it from the system. Raising interest rates is far worse and a depression is far worse than any inflation.
https://www.bostonglobe.com/2022/09/21/opinion/fed-wants-you...
Well, I guess somehow the reputation of USA of being an "economically free" country versus China lets them get away with central planning and soon the CBDCs and the national IDs for everyone. Not that I like that in China either!
In 1923 the exchange rate has reached 1 trillion DM for 1USD. We all know how it had ended.
In the case of Weimar Germany, there was the little matter of THE VERSAILLES TREATY that required them to endlessly pay war reparations and punitive payments in gold. Britain told France to cut it out, but France was mad enough at the Germans that they continued. This led to the rise of the Nazis and WW2.
https://www.history.com/news/treaty-of-versailles-world-war-...
You should read more economic viewpoints, such as Walter Mosler on hyperinflations:
https://moslereconomics.com/wp-content/uploads/2020/11/Weima...
Oh, and meanwhile there was a "free money miracle" going on in nearby Austria, and clearly did not lead to hyperinflation, quite the opposite: everyone paid off their taxes due to the demurrage of the free money... keep in mind this was while all around them there was a growing depression... even Mises institute grudgingly agrees!
Oh I know that. My argument was rather pedantic.
Now since you've mentioned it I wonder if the situation with Russia might to the same outcome eventually.
There is little risk of Russia becoming a propaganda-driven murderous authoritarian menace. It already is one.
The most notable different policy prescription (job guarantee) is odd because it's originally a right-wing program they just decided is left-wing.
Their description of how government issued currency, coercion, and tax act as a tool to capture services from the economy (as opposed to filling up a treasury for the government to spend) is extremely underrated in mainstream economics.
> right-wing program they just decided is left-wing.
Why would MMT be limited to traditionally left/right boundaries?
Yes it does, it makes it not an economic theory but a political one.
> Their description of how government issued currency, coercion, and tax act as a tool to capture services from the economy (as opposed to filling up a treasury for the government to spend) is extremely underrated in mainstream economics.
It is Abba Lerner's functional finance and it essentially only applies to the US federal government, as noone else is big enough. But they also like to extend it to "banks don't lend out deposits", which isn't true. And the idea that you can raise taxes to control inflation doesn't appear to be true either.
> Why would MMT be limited to traditionally left/right boundaries?
Cuz they're only trying to sell it to left-wing politicians.
Describing the job guarantee/transition job as equivalent to "workfare" reveals a fundamental misunderstanding of the JG. Two ways in which it differs significantly (but not the only ways):
1/ it pays a living wage / socially inclusive wage, unlike most current (un)employment insurance programs
2/ it is non-coercive. You have the promise of that job, not a mandate to perform it. Other social programs remain available for those unable for for a variety of reasons.
No, it pays minimum wage. (Mosler calls it "non-disruptive wage" because it's not enough to compete with other jobs.) The trick is the marketing just assumes minimum wage will be raised, so they quote that number instead. And of course it never gets raised and you can never be promoted.
> 2/ it is non-coercive. You have the promise of that job, not a mandate to perform it. Other social programs remain available for those unable for for a variety of reasons.
It's coercive to regular workers because their boss can fire them at any point, safe in the knowledge they'll get a minimum wage job the next day.
https://en.wikipedia.org/wiki/Treaty_of_Versailles#Historica...
https://www.youtube.com/watch?v=YygQ0Wq0wDA
It argues quite convincingly that war reparations had almost nothing to do with the hyperinflation and that the seeds were sown way before ww1 and then watered during WW1 when germany essentially became a command economy and finally harvested by the first Weimar government's managment.
So my working assumption is that many of those people are going to try to cash out Monday morning.
Wow, this is scary. It reminds me of the history of monetary economics in the US during the 19th century, a period known for "wild cat" banks and a system where any bank could print their own private currency. In that system, currency was discounted the further away it was physically from the bank which issued it. The system was divided between "city banks" and "country banks." The more remote the location, the less up-to-date information was available about the health of distant banks, and so the more distant currencies were discounted more heavily.
The modern crypto wild west version of this is going to end in a result of going from "getting $0.99+ on the dollar is probably good enough for a lot of people" can turn into "getting 0.01+ on the dollar is as good as it gets" within minutes, if and when there is a run on crypto stablecoins.
The main point I was trying to make was that people trying to make a buck off of the USDC depeg didn't need to wait until Monday morning. So I didn't think Monday morning would be particularly significant in that particular regard.