Nima

It doesn't have to be a budget surplus, it could also be deficits that are simply too small. And there absolutely are such requirements imposed upon Greece, so the government is working towards achieving them. In other words, the impetus is in a direction that starves the private sector of net private saving, in particular since Greece has a chronic current account deficit. "Meanwhile Greece received 248 billions Euro as help to restart economics." That's not how you restart an economy, in this instance in particular, Greece is being given the money in the form of IMF/EU loans that they have to repay, in a currency that they don't have sovereign discretion to create, only the ECB does, and only to buy bonds. It is certainly true that Greece has a large welfare state and corruption etc., but so does Germany and other countries. And of course that produces economic inefficiencies etc., but it doesn't explain an outright Depression. Arguing that the 3% rule was "never" achieved is factually simply wrong. But even if that was true, it still doesn't mean that deficits are large enough to supply the private sector sufficient net saving. You are hitting on part of the problem. This is a symptom. Greece has to borrow money from the EU and the IMF etc., because its own government doesn't have the legal permission to spend it into existence, since they are bound by the underlying impossible budgetary constraints. If they had their own central bank and their own sovereign treasury they would not be under this constraint. Of course that wouldn't automatically mean that they would have a prosperous booming economy, but it's a necessary precondition long term. Austerity is a targeted attempt to reduce the government's debt or at least slow down its growth (in other words to starve the private sector of net saving), without taking other factors into consideration. Yes, austerity makes the private sector poor and so by necessity it makes those with guaranteed income from the public sector wealthier and more powerful.

Do you hold any dollars or other fiat currency?

"I'd say the concept alone is all that is needed" Then that's where we disagree vehemently.

"So, if you want to go into why fiat money has value, certainly taxation if a factor, but gold backing helped get fiat off the runway." What's your historical evidence that gold backing played a role in the emergence of fiat money? "But, I wouldn't assume there is a need for an increase in savings, but, instead, I assume there is a tendency for spending excess savings for utility (often in the form of employment)." It's fun to make assumptions here and there. But from time to time, also look at the empirical data: https://www.economicsjunkie.com/government-budget-surpluses-can-cause-economic-depressions/ http://www.economicsjunkie.com/sectoral-balances-and-private-saving/ "who controls inflation (non-government banks who seek to diminish sovereign control in an aim for world-serfdom (world-government))" Currently for example we see people, potentially globalists, try a little experiment called how do I cripple an economy by imposing a move towards balanced budgets/surpluses, already officially labeled the "Greek depression": https://en.wikipedia.org/wiki/Greek_government-debt_crisis

"I'm not certain why you care so much about the origin of money, especially in the context of explaining economics to others (who probably don't care)." I only care insofar as certain present day theories rely on un-empirical reasoning. "The likelihood is a priest class extracted tribute in the form of partial harvests, then contracts on partial harvests, then general contracts on goods. The notion of contracts goes way back. An enlightening book on the matter is "Babylonian and Assyrian laws. contracts and letters". This notion of a general goods contract can be encapsulated in a coin, and by its commonality and convenience of use, coins (tokens of tribute to the temples) became money. But, I'm no anthropologist, and how a hammer came into existence doesn't factor in to me explaining to someone else how to use it." Thanks, I'll check out that book, I'm currently waiting for delivery of Graeber's "Debt: The First 5000 Years". "To explain the current system, for me, the easiest method is to simply say "the first dollar in existence was a loan from the federal reserve with interest. There is no way to pay back both that dollar and the interest because the interest does not exist; we must borrow more just to pay back the interest." However, this is a simplification, since the fed can relinquish debts." But that doesn't answer the question why the first dollar loaned into existence had value. It's true that money can be created by both government spending and loaning into existence. The question is why the latter was possible in the first place. The state theory of money says because taxation gives the token value. Bank reserves and cash are high powered money (HPM) spent into existence by crediting private bank accounts. A private bank loan generates a bank deposit which is a claim to HPM. "In your video, you present what I think is a wrong attachment to the notion of needing a deficit. If I put $100 into the economy, then for each following year, tax $10 and spend $10, the system can go on continually without either a surplus or a deficit." Yes, you can run balanced budgets in the following years continually, but without an export surplus you might be depriving the private sector of needed net private saving, resulting in unemployment. "What I'm getting at here is it is better the analyze the individual factors for a better understanding of the dynamics involved. And, to my knowledge, it is generally agreed upon that inflation is better than deflation from a societal stand point. The common example is, if you were a business looking to invest in infrastructure to create some product, in inflation, the potential gain from selling the product goes up relative to the infrastructure expense, whereas, in deflation, it goes down - and this encourages business development during inflation." There are many reasons for inflation (if we define it as an increase in aggregate prices) that I couldn't get into in this simplified model, but in general you get the gist of it in that inflation can be routine at times in a monetary production economy. For example when a bank makes a loan to an entrepreneur he is allocated spending power (hopefully for a good project) over others and that CAN push up aggregate prices for capital goods & labor. However, worker productivity also hopefully improves as a result of his project, so that can counterbalance some price increases. For example, entrepreneurs in the consumer goods sector always try to achieve a markup over labor cost. In a simplistic economy with no capital account imbalance the surplus thus created then becomes available for different parties and allows us to put some workers into the investment goods sector, allowing them to consume the surplus that is not available to the workers in the consumer goods sector due to markup. Investment is the reason why we have aggregate corporate profits to begin with. Deflation is problematic in a monetary production economy if it is the outcome of unsatisfied changes in the individuals' liquidity preference. If liquidity preference goes up without corresponding injection of net private saving (e.g. via changes in taxation levels), people consume less so they have enough left to pay the tax, which in turn reduces the price investors are willing to pay for capital goods, resulting in layoffs etc. The market doesn't seem to "clear" as some tend to think when they think of deflation. It can also not be denied that in a monetary production economy's private sector we are psychologically or historically or for whatever reason inclined to try and maximize nominal monetary inflows over nominal outflows. The importance of this and its impacts on pricing inside the structure of production cannot be ignored.

Muh polar bears.

^ LMFAO. GOOD ONE! In seriousness, I think it imitates biology and evolution that men have to work harder until they have impressed a fertile young female to inseminate. On the flip side, they get to bounce after that's over with and inseminate the next female, well at least biologically, while the female is stuck with the aftermath of the sexual act.

I've also looked back at major decisions, and I've again and again concluded that on the big decisions it seems like I would have done it again, but I'm still open to changing my mind on that. You are now hyper vigilant about your life choices and I think that can be helpful, but what I'm wondering is: were you as hyper vigilant at the time you made all the choices you now deem bad, or were you much more confident that you were doing the right thing in the moment?

Very helpful, thanks!

That's a theoretical possibility, but empirically I don't think many wars have wiped out enough people in order for it to matter materially in this equation. Without trying to defend Keynes right here, I just want to point out that through MMT I've actually learned that some of these things that are being said about Keynes are strawman arguments and bad interpretations of his actual writings. ("Paying people to dig holes", etc.) But I need to research Keynes' original writings a bit more to make more informed statements in this regard.

The historical evidence shows that these coins that were minted back then were circulating at a huge premium to the actual metal value. This is because the government accepted them in tax payments. This is actually supportive of the case that I'm making in this video. They just happened to use gold and silver as material for SOME of their currency, not even most of it. Some historical evidence shows that some of these precious metal coins gave the user access to exclusive marketplaces. I also think additionally, there simply wasn't as much technology back then as there is now. So gold and silver were actually pretty good materials to use to mint tokens that couldn't be counterfeited easily. I think your last paragraph is spot on. It's not like the government is creating something out of nothing. The government has to have the ability to enforce the tax it declares for its money to have value. That in and of itself is not exactly "nothing", is it? Yes, the state is vital in running the fiat money racket it imposes upon us, I don't think our anarchist senses have to be offended by observing this mechanism, and integrating it with the rest of our economic understanding. Nor does any of this mean that this is the only way monetary systems can ever be run for eternity. I've said before that Bitcoin for example functions in part much like a fiat money system, only a private one where it's not violence that makes you surrender the token, but rather cryptographically secured access restrictions to the Blockchain. Also, I wouldn't say that MMT leads you to conclude that war is good for the economy. War destroys lots of productive capacity, in fact I've argued before that war has been the cause of many hyperinflations.

Haha, nice I've also recorded a related clip:

I think the key misunderstanding is this: "MMT says that there is no need for government to put taxes in place" MMT says the exact opposite. It says that if a government wants to introduce a monetary token, it HAS to first declare a tax, payable in that token only, so that the governed subjects have demand for it. Does that make sense?

I just wrote a post with my thoughts on Bob Murphy's critique of Modern Monetary Theory. Thoughts as always appreciated.

Post-truth is where leftist academics have always been. Now they think they can somehow make it everyone else's problem. Pretty typical tactic, and pretty entertaining to watch.

I wrote a new post about how Bitcoin's value proposition can be correlated with general mechanisms by which any fiat money economy operates, as I've explained in some recent posts on this forum here. Here is the conclusion from that article: In other words: people ultimately hold Bitcoins, because everyone needs Bitcoins to submit a new entry into the blockchain, usually for the purpose of making a Bitcoin transaction; however, in many cases, this is also just in order to submit a hash into the Blockchain that proves the existence of a document (or other data) at a certain point in time. This is just one example of Bitcoin usage that is not facilitating the exchange of goods and services.

I think it's probably important that if you're active you shoot up as many flares as possible. One big rule of Saul Alinsky's always comes to mind again and again: Stef pointed out how successful political movements make themselves look bigger than they are. In the US I have seen evidence that the mainstream media is not as big as it thought it was. The eye opener was when I saw literally every other person in line for Trump rallies wear infowars t shirts. This was a huge flare for millions of people all over the country IMO. I've been wondering if something comparable can be achieved in Germany. Support seems to be there, but I haven't lived in Germany since 2003 which is when I left. But most of my family is obviously still there.

A universally defensible claim.

By the way, I will be on the FDR call in show tomorrow to discuss this stuff with Stef, in case anyone's interested

Should be something like this: Bills 0-1 yrs Notes 1-10 yrs Bonds 10-30 yrs I'm sure there is some source but I'm fairly certain because I invest regularly in these types of assets. If you're interested in the avg outstanding maturity, this should be helpful: https://www.quandl.com/data/USTREASURY/AVMAT-Average-Maturity-of-Total-Outstanding-Treasury-Marketable-Securities

Yes. The Fed always completely accommodates the demand for reserves, by mathematical necessity, otherwise the interbank lending rate would break outside the bounds of the policy rate window. The amount of reserves held by banks is an after the fact outcome. It plays absolutely no role in the banks' decisions to lend. The bank decides to lend when it finds willing and able borrowers, and creates the money to do this out of thin air. If the bank is ever short of reserves as per reserve requirement, they will obtain the reserves wholesale through different venues: by offering savings accounts with interest, by borrowing on the interbank lending market, or, in last resort, from the Fed directly, and generally only against good collateral.

All transaction fees for transactions that have been successfully included in a block go to the miner who mined that block.

Yes, you're right about the analogy between taxes and bitcoin fees. A miner essentially takes the strings of a bunch of transactions sitting in the mempool, makes sure they're valid, glues them together to what's called a block, and then has to solve a puzzle to add this block to the blockchain, the permanent immutable ledger of all bitcoin transactions. If he solves the puzzle his block gets added and he receives a block reward (currently 12.5 BTC) plus the sum of all transaction fees included in the transactions that he put in the block, delivered to his bitcoin address. At some point in the distant future the block reward will vanish and the only source of income for miners will be the transaction fees, so they'll gain in relevance over the decades. Does that make sense?

Sorry for being unclear "tx" fee refers to transaction fee. This is the fee that all users need to pay every time they make a bitcoin transaction to entice miners to include it in the next block, if that makes sense?