On March 15th, the Eurozone branch of the Throw-more-money-at-it lobby were making themselves heard, calling for the ECB to run the printing presses for a limited (author pulls down lower eyelid with index finger) period as a supplement to the to the €120 billion in extra security purchases already made to that point. [NB total ‘assistance’ to April 17th had reached to €275bln in RP, €148bln in securities, and €126bln in FX swaps for a total of €550bln in five short weeks].We responded:-
Category Archives: Credit
As governments took ever more drastic action to close markets and confine people to their homes, the question loomed of how to mitigate some of the worst consequences of this self-imposed state of siege. A Twitter thread of March 10th offered up some initial thoughts, here lightly edited.
Markets have paradoxically both been on edge – and in the throes of euphoria – since the repo shock in mid-September, being at the same time alarmed and yet strangely reassured by the Fed’s frantic backpedalling and the $400+ billion boost to its balance sheet which this entailed. Extreme levels of overstretch are everywhere apparent.
MMT has recently enjoyed a sudden resurgence in popularity. but, like so many other systems which claim to reveal previously undiscovered truths, it turns out to be nothing more than a retread of a number of age-old fallacies, only appealing because it seems to promise the Provider State unlimited power to interfere in our lives. We discuss its failings here.