Today's Inflation Surge Should Discredit Modern Monetary Theory Forever - Page 14 - Politics Forum.org | PoFo

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#15256723
ingliz wrote:Thirty-year fixed mortgage interest rates hit a low of 2.65% in January 2021.


:lol:


:lol: :lol: :lol: :lol:

1) That is an 80% interest rate of the capital over the period.

2) You got that slogan from an American editorial with no actual T&C's.

3) This offer will not beat American inflation either.

4) These advertorial offers were during the pandemic when the mortgage market had grinded to a halt.

So lots of these mate:

:lol: :lol: :lol: :lol:

From exception to exception you are trying to create rules while confirming that your theories only apply to the exceptions that you hate.

US supremacy primarily. All your arguments require US global supremacy for them to be workable.
#15256724
noemon wrote:offers were during the pandemic when the mortgage market had grinded to a halt.

It's 7.32% now.

So, are you still saying US borrowers who bought their mortgages in January 2021 are not benefiting from inflation?


:)
#15256725
ingliz wrote:It's 7.32% now.

So, are you still saying US borrowers who bought their mortgages in January 2021 are not benefiting from inflation?


:)


Of course they are not beating inflation. Your advertorial contains no T&C's and for all the reasons already explained. For your mortgage to beat inflation it has to beat it throughout the entire duration of the mortgage.

Besides the people who managed to get these deals are probably counted in the palm of one hand as noone could view houses in January 2021. They are not plenty enough to even count for statistical error.

:moron:
#15256728
noemon wrote:Of course, they are not beating inflation

I didn't say they were beating inflation. I only said that they were benefiting from inflation. That their houses would be cheaper than they expected.

They pay the same amount, but those 'inflated' £££ are worth less.


:lol:
#15256731
Potemkin wrote:Borrowers and debtors benefit from inflation, @noemon. This is universally accepted. Why do you keep denying it? :?:


Why do you keep denying that only enterprise-level debtors benefit Potemkin? We have already agreed on that.

Why do you keep obfuscating this as if it means something of any substance?

@ingliz, their incomes are lower so their mortgage payments are a lot more painful.

And even if in 30 years a few mortgage holders manage to gain something from inflation, so what?

It is universally accepted that inflation is the "thief in the night" from which noone benefits.

Why do you keep denying this Potemkin?

Which goat are you planning on scaping this time?

I am denying this because it's not true, winners of high inflation are counted in the palms of one hand, are exceptions and it has no actual value for anything as exceptions do not make rules, other than scapegoating them.
#15256738
Potemkin wrote:You don't need to "prevent it from being spent on goods and services at full employment/production", since the extra money is 'absorbed' by the expanded economy, the potential inflation is suppressed by the increased supply. And once the economy has expanded, it's expanded.


This could be true on a general level with overall inflation numbers, but inflation is usually not even, some sectors and goods/services can go through deflation while at the same time others go through inflation. We saw this during the pandemic, where some goods/services were in extreme demand and others fell off the table.
#15256749
noemon wrote:1] Which is where we almost are today in the west without Versailles but out of our own making.

2] We have reached weimar levels of debt & QE anyway.

3] @Steve_American Standard economics are 50-100 years old, controlling inflation through currency manipulation via the money supply is an ancient practice, plenty of centuries old.


1] This sentence is confusing. Weimar Germany had to buy gold to pay reparations under the treaty. How is the US and UK, etc. (not to include developing nations) in any way like Weimar?

2] Do you have any evidence to support this? Also, Weimar kept digging. I strongly assert that Weimar had dug itself very deep very fast, and the the US & UK are nowhere near as deep as Weimar got to.

3] MMTers assert that using interest rates to "control" the economy has not ever worked all that well. Even its supporters admit that it is a blunt tool. Prof. Mitchell has asserted and provided some evidence that there is little correlation between interest rates and falling inflation.

I think you and I have reached the point where further discussion will not do any good. You keep making unsupported assertions based on you 'religion' of MS Econ theory. I keep disagreeing, and I think I have provided more evidence than you have. I have agreed with you that it is possible that developing nations can't use it because a] they all have debts denominated in dollars, and b] even if they didn't have those dollar debts, I have not been convinced by MMTers that such nations can use MMT, but only because they have never provided any argument to support a claim that they can use MMT.
Also, I have provided a short list of nations that MMTers would agree can use MMT. It was: UK, NZ, Aust., Canada, Japan, the US, Russia, and China. You ignored my list.
Finally, as an American I'm mostly interested in what the US Gov. does to help Americans. I don't live there anymore, but I'm retired and don't contribute to the economy anyway. Your simple unsupported assertions that for the US MMT is unworkable have not convinced me. You claim that the current inflation has proven that MMT is wrong when it asserts that the US Gov. can deficit spend more now, and doesn't need to sell bonds to do it. My reason for this is my belief that the current situation is not normal. The pandemic caused shortages of things and diverted demand from services to things at a time when it was hard for corps to ramp up production of things, then came the war in Ukraine, and OPEC+ raising the price of energy, and ACC is damaging crop yields in the US and the world, which should drive up food prices. All of these factors should drive up prices of things, energy, and food; so it isn't surprising that there is inflation. The US is a market dominated by a few corps [the oil giants, Amazon, and Walmart, etc] which can increase their prices because they have monopoly pricing power.
It is very hard to demonstrate that the current inflation is being caused or not by the Gov. spending to support the economy in the pandemic and then after Biden took office. You have not even tried to demonstrate this, and instead just asserted it. Again, your assertions don't convince me. They may and likely do convince many others who basically already agree with you because the media have been supporting this theory for several decades now.
.
#15256761
noemon wrote:The euro is a reserve currency.

But it didn't even exist during the post-war boom which was common across countries that didn't have reserve currencies or geopolitical advantage and hadn't "emerged victorious". So it wasn't down to any such unique conditions in Britain.

Debt sustainability is obviously a matter of geopolitical advantage, bankers have every confidence that Global Empires or very powerful economies like Japan's will pay them back by hook or by crook, no such confidence for average or developing countries.

Yeah, Japan with its 266% debt-to-GDP ratio. Or the other rich countries which aren't global empires and have higher debt-to-GDP than Britain.


There are no distributional effects during a high inflationary spiral,

That'd come as news to BP, ExxonMobil etc just now. Or the consumers facing fuel poverty. Or food commodity traders, or the global shipping cartel, or all the corporations making record profits just now. Or OPEC in the 1970s, or the workers in unionised sectors who got above-inflation pay rises.


this is antisemitic drivel used by the Germans to target the Jews as the ones holding enterprise-level debt(the only type of debt large enough to profit) and thus according to Hitler causing inflation so that the Jews can profit on the backs of the Gentiles.

As if the Jews or the bankers are forcing you, Steve American the entire left and Hitler to openly argue for more debt and more printing during an inflationary spiral.

Other than that there is no winner and trying to find one so you can throw all the blame at for the policies that you are actively pursuing is pure scapegoating.

:eh: has nothing to do with what I've said.
#15256763
SueDeNîmes wrote:But it didn't even exist during the post-war boom which was common across countries that didn't have reserve currencies or geopolitical advantage and hadn't "emerged victorious". So it wasn't down to any such unique conditions in Britain.


Excuse me, are you for real? I already told you that sterling was reserve currency and that Britain was at total war and the pre-eminent empire of that time, you then came back with European rich countries and you were told that the euro is also a reserve currency. I have explained these privileges several times over many posts. You are merely confirming and buttressing my arguments.


That'd come as news to BP, ExxonMobil etc just now. Or the consumers facing fuel poverty. Or food commodity traders, or the global shipping cartel, or all the corporations making record profits just now. Or OPEC in the 1970s, or the workers in unionised sectors who got above-inflation pay rises.


Broken record. Energy companies do not have more purchasing power today than they had during moderate inflation. Wholesalers are subject to 75% tax and a lot of them have gone under. High inflation does not make anyone richer, nor is high inflation the cause of higher energy prices but vice-versa.

:eh: has nothing to do with what I've said.


Of course it does. I keep telling you lot, what is your underlying point trying to frame a "winner"? We both know what your underlying point is to scapegoat that frame because there is no other point to be made. So be frank with yourself.
#15256776
One argument as to why inflation is happening is because boomers are retiring and pulling their money out of the capital markets. This means money for borrowing/investment has to become more expensive, since there is less of it sloshing around the financial system.

In the long term, maybe this is a good thing. Perhaps, money has been too cheap for too long. Unsustainably cheap.
#15256778
noemon wrote:Excuse me, are you for real? I already told you that sterling was reserve currency and that Britain was at total war and the pre-eminent empire of that time, you then came back with European rich countries and you were told that the euro is also a reserve currency. I have explained these privileges several times over many posts. You are merely confirming and buttressing my arguments.


On the contrary. The boom was post-war up until ~late 1970s. Whether Britain was a superpower or a reserve currency issuer (not really and debatable) is irrelevant since the boom was common across countries which were neither (the Euro didn't even exist until 1999). It patently wasn't down to any unique conditions in Britain.

What they had in common was Keynesian policy, and it worked.


Broken record. Energy companies do not have more purchasing power today than they had during moderate inflation. Wholesalers are subject to 75% tax and a lot of them have gone under. High inflation does not make anyone richer,

It's producers (BP, ExxonMobil etc), not wholesalers, making record profits - which are anything but unique to the energy sector. If govt has to respond with windfall taxes, it is, by definition, redressing distributional effects.

nor is high inflation the cause of higher energy prices but vice-versa.

Who's saying otherwise?

Of course it does. I keep telling you lot, what is your underlying point trying to frame a "winner"? We both know what your underlying point is to scapegoat that frame because there is no other point to be made. So be frank with yourself.

Nope, still nowt to do with it AFAIC.
#15256781
SueDeNîmes wrote:On the contrary. The boom was post-war up until ~late 1970s. Whether Britain was a superpower or a reserve currency issuer (not really and debatable) is irrelevant since the boom was common across countries which were neither (the Euro didn't even exist until 1999). It patently wasn't down to any unique conditions in Britain.

What they had in common was Keynesian policy, and it worked.


Only global empires and exceptionally powerful economies like US, Japan, EU, UK can sustain these levels of 200% debt and QE in the trillions. Everybody else is insolvent at half the debt and inflation is at 1000% at half the QE on a per capita basis.

Your graph of debt for the British Empire confirms this once again.

It's producers (BP, ExxonMobil etc), not wholesalers, making record profits - which are anything but unique to the energy sector. If govt has to respond with windfall taxes, it is, by definition, redressing distributional effects.


Distributional effects of a lack of supply of energy, not distributional effects of inflation.

Who's saying otherwise?


You, by blaming inflation as above as the cause of profiteering and arguing that inflation is redistributing the money. Inflation is eating away everybody's money and not redistributing anything.

Nope, still nowt to do with it AFAIC.


So tell us your underlying point then? Who are you trying to frame as the "winner from inflation" and consequently as the one at fault?

Other than your own debt-laden policies?
#15256884
noemon wrote:Only global empires and exceptionally powerful economies like US, Japan, EU, UK can sustain these levels of 200% debt and QE in the trillions. Everybody else is insolvent at half the debt and inflation is at 1000% at half the QE on a per capita basis.

Dunno how true that is but no one's suggesting "everybody else" maintain Japanese or post war debt-to-GDP ratios. There is no reason to think today's far lower ratio is at "Weimar levels". And the post-war ratio was whittled away by GDP growth, not fiscal consolidation. Expansionary Keynesian policy worked, not just here, but across nations which were neither superpowers nor reserve currency issuers; victorious or not.


Your graph of debt for the British Empire confirms this once again.

It's neither "for the British Empire" nor mine.

You, by blaming inflation as above as the cause of profiteering and arguing that inflation is redistributing the money.

Different thing again and I don't recognise either. Inflation is the rate at which prices rise, not the cause of price rises (whatever that could mean). It can change for all sorts of reasons with different distributional effects.

Inflation is eating away everybody's money and not redistributing anything.

Money is obviously being redistributed AND losing purchasing power per unit of currency.

So tell us your underlying point then? Who are you trying to frame as the "winner from inflation" and consequently as the one at fault?

What I mean is what I've said, which I can't square with whatever you're imputing. Certainly nothing to do with antisemitism.

Currently, it's pretty uncontroversial that corp's with market power are profiteering from supply shocks which they didn't cause. It's what profit-maximising firms do. Back in the day, unionised workers demanded above-inflation pay rises because they could. Whatever "fault" anyone wants to ascribe is irrelevant to the mechanics.
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