Money supply

During his visit to hurricane-stricken Puerto Rico, President Donald Trump shocked the bond market when he told Geraldo Rivera of Fox News that he was going to wipe out the island’s bond debt. He said on October 3rd:

You know they owe a lot of money to your friends on Wall Street. We’re gonna have to wipe that out. That’s gonna have to be — you know, you can say goodbye to that. I don’t know if it’s Goldman Sachs but whoever it is, you can wave good-bye to that.

The policy of guaranteeing every citizen a universal basic income is gaining support around the world, as automation increasingly makes jobs obsolete. But can it be funded without raising taxes or triggering hyperinflation? In a panel I was on at the NexusEarth cryptocurrency conference in Aspen September 21st-23rd, most participants said no. This is my rebuttal.

The Australian banker is a smug species, arguably more than his international peers.  Caught off guard by the financial disasters of the late 1980s and early 1990s, the Australian banking system has become an expression of a classic oligopoly, manipulating prices and squeezing customers.  Such an Australian banker is perky as well, self-assured that any inappropriate — let alone illegal — behaviour might be passed off as an effort to do better, to buck trends, to be audacious.

The Fundamentals of Exchange

How Do You Tackle a Big Idea?
It has long been believed that Capitalism is the last economic system. It has triumphed over its rivals, socialism and communism, and has now come to define modern society. Many believe that the religion of Adam Smith was the culmination of all of our economic experiments. To many, not only is Capitalism the best economic system that humanity has ever devised, it is the best that it will ever devise.

Illinois is teetering on bankruptcy and other states are not far behind, largely due to unfunded pension liabilities; but there are solutions. The Federal Reserve could do a round of “QE for Munis.” Or the state could turn its sizable pension fund into a self-sustaining public bank.
*****

Free trade, debt and war are all part of the same package, each feeding off the other. They are – each of them – rackets in their own right and they are all symptoms of the same problem. That problem has to do with the fact that our government  – along with the rest of the world  – has entirely forgotten the basic concept of how a national economy actually “earns” its way to prosperity.

Japan has found a way to write off nearly half its national debt without creating inflation. We could do that too.
Let’s face it. There is no way the US government is ever going to pay back a $20 trillion federal debt. The taxpayers will just continue to pay interest on it, year after year.
A lot of interest.

The banks themselves create money, usually at a rate of at least 9 to 1 - for every one dollar deposited, the banks can create an additional $9. There is a massive expansion of the money supply. [...]

Higher interest rates will triple the interest on the federal debt to $830 billion annually by 2026, will hurt workers and young voters, and could bankrupt over 20% of US corporations, according to the IMF. The move is not necessary to counteract inflation and shows that the Fed is operating from the wrong model.