Australia's largest stock trading and investment forum Australia's #1 stock forum

"The other thing is when the money is spent is needs to be spent...

First 133 Last

Share
Profile

Follow
moorookamick

23,957 Posts.

770

14/04/20

15:13

Post #: 44034871
Share

Originally posted by omeara29: ↑

The thing I realised with MMT is that the bonds are issued to other organisations like banks, investment house, wealthy individuals and foreign governments.

The Fed can purchase those bonds back by printing money which is does through QE and extinguish the debt and the corresponding interest payments.
So the U.S government can never go broke or any other government that controls the issuing of its own currency.

Unlike countries like Greece who got into severe problems because it does not print its own currency and has to borrow money from the EU and it did so at very high interest rates.
Governments are only allowed in the EU to run a 3% percent deficit so they have a problem when they want to stimulate their economies because they cannot spend enough and they cannot later buy back their own bonds because it is all governed by the EU and the money is printed by ECB.
Which is why many of the EU countries have unemployment rates of 10 plus percent and unemployment rates of 17 to 20 percent for young people.

The other thing is when the money is spent is needs to be spent and production of real goods and services so that inflation does not get out control which has happened in other countries because the money is not on production.

Expand

"The other thing is when the money is spent is needs to be spent and production of real goods and services so that inflation does not get out control which has happened in other countries because the money is not on production."Does this apply in wartime when goods are produced , sent overseas and destroyed without any financial return?
Upvote

Reply

Top Stories

Week 28 Wrap: Tariff chaos back for some reason; CBA holds strong

HotCopper Highlights: RIP to Botanix (for now); Droneshield new ATH; Trigg mystery halt

AII

Inside the depths of Panasqueira: A legacy carved in rock

CWX

Carawine faces Fraser Range JV collapse as IGO moves to scrap partnership

AAU

Antilles brings Chinese ally on board to keep Neuva Sabana work chugging on

Listen: HotCopper Wire Podcast 017 – RBA holds the toppings

ILU

Rare earths stocks surge as Pentagon buys big stake in US REE miner

Trump just dropped a 200% tariff bomb. Here's how to cash in

VMM

'Big tick': Viridis positions for global leadership with Colossus pre-feasibility study

LIS

'Opens doors': Li-S Energy the first Oz company to produce lithium metal foils