Re:U.S. SEC Wins 'Shadow Insider Trading' Trial
by JumpCrisscross on Saturday July 06, 2024 @07:35AM
(#40889788)
> What are the biggest errors in that post?
1. “Governments of all countries 'print' new money at a steady rate”
Most money is privately created [1]. While America creates money somewhat steadily [2], many currencies are more volatile [3] and show distinct regimes [4]. And while that error can be covered by expanding the definition of steadiness, steadiness between countries’ monetary policies simply doesn’t exist. America is tightening while China is loosening, for example. (This is basic balance of payments. The claim about FX rates being constant is trivially false.)
2. “some of those bonds are bought up by the markets but most bonds are bought up by reserve banks”
Depository institutions hold few Treasuries, relatively speaking [5]. The Fed owns close to half of outstanding Treasuries, but it’s currently a net seller [6].
3. “Countries don't strictly need to tax citizens since they can just print money”
I’ll throw in a misleading statement versus outright error.
Sure, a country could MMT. But that means you can destroy money only through recession, default and selling government bonds. Since the comment rails against debt, that leaves an economic policy that requires—when inflation arises—intentionally forcing recession (likely via spending cuts) à la Volcker.
1. “Governments of all countries 'print' new money at a steady rate”
Most money is privately created [1]. While America creates money somewhat steadily [2], many currencies are more volatile [3] and show distinct regimes [4]. And while that error can be covered by expanding the definition of steadiness, steadiness between countries’ monetary policies simply doesn’t exist. America is tightening while China is loosening, for example. (This is basic balance of payments. The claim about FX rates being constant is trivially false.)
2. “some of those bonds are bought up by the markets but most bonds are bought up by reserve banks”
Depository institutions hold few Treasuries, relatively speaking [5]. The Fed owns close to half of outstanding Treasuries, but it’s currently a net seller [6].
3. “Countries don't strictly need to tax citizens since they can just print money”
I’ll throw in a misleading statement versus outright error.
Sure, a country could MMT. But that means you can destroy money only through recession, default and selling government bonds. Since the comment rails against debt, that leaves an economic policy that requires—when inflation arises—intentionally forcing recession (likely via spending cuts) à la Volcker.
[1] https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...
[2] https://fred.stlouisfed.org/series/M2SL#0
[3] https://fred.stlouisfed.org/series/MYAGM2ARM189N#0
[4] https://fred.stlouisfed.org/series/MYAGM2EZM196N#0
[5] https://en.m.wikipedia.org/wiki/National_debt_of_the_United_...
[6] https://fred.stlouisfed.org/series/TREAST