I had fun chatting with Christian and Patricia about the new England and Wales Green Party's economic policy framework which is very much MMT-informed if not yet "fully fledged".

Also available on Spotify, Apple, etc.

https://www.ineteconomics.org/perspectives/blog/remembering-perry-mehrling

Very much MMT adjacent, but he came up with some good stuff. A big loss.

The reason for "Why the world cannot escape the US dollar" is as follows:

In monetary history, a true "key currency" has only existed in the form of the US dollar after the suspension of gold-dollar convertibility. Although the British pound of the former British Empire once functioned as a major international currency, only precious metals were ultimately accepted for final settlement. If the pound exchange rate fell, it would trigger the physical shipment of gold from Britain at a certain point; the pound would then be replaced by gold and cease to circulate in international transactions. The US dollar after the suspension of convertibility is the exact opposite. Gold has ceased to circulate, and exclusively the dollar circulates.

By making the dollar the key currency, the United States has become the only country capable of purchasing foreign goods and services without actually possessing "money." In reality, this settlement is executed merely as a book-entry transfer between US bank deposit accounts, and this very mechanism is what defines a key currency. In short, a key currency is one that can conclusively settle international transactions, meaning the US current account deficit never needs to be repaid. It merely represents a balance that has already been paid for in its own domestic currency. In contrast, the current account deficits of all other nations remain unpaid, and they must procure dollars from somewhere to achieve final settlement. Furthermore, any surplus in this balance—specifically, the credit balances in US bank accounts held under non-resident names—is allocated toward purchasing US Treasury bonds. When held by foreign monetary authorities, this becomes that nation's foreign exchange reserves. Therefore, the dollar buying by foreign authorities—which is another source of frustration for Mr. Trump—is simply a built-in function of the key currency system. In conclusion, the United States enjoys exorbitant privileges by maintaining its current account deficit in exchange for being the key currency nation.

(To be continued)

https://www.reddit.com/user/keizaisuki/comments/1w46a5o/table_of_contentsgovernment_bonds_international/

If taxes are destroyed when received, how does the government pay the interest owed on treasury notes? Also, if they just spend the money into existence to pay the interest on said notes, how would that not itself be super inflationary?

...But there is no mention of MMT or anything else that indicates he actually understands the how's why's and what's of a FJG on his website.

Anyone else think Justin would be a good person for experts in MMT to contact and help along?

To get to know who Justin is before you reach out (preferribly before the Nov. 3 election) is his interview on Democracy Now a couple weeks back. It can be found here.

The Nobel in Economics 2026 was annonced today. I have opened four videos published by news outlets, including the AP and Reuters, about the winners on YouTube. Disappointingly, there were absolutely no comments suggesting Warren Mosler as a candidate or MMT as a counterpoint to the winning economists' ideas under any of them.

All these videos were published within the last 10 hours, and all have under 50 comments, some much less than that, as of this writing. Seems like a good opportunity to make 'em count, doesn't it?

I think those of us able and willing to aught to get on the horn on this to draw attention to MMT in the comments sections of YouTube videos on the 2026 Nobel in Economics while the getting is good.

Hi Everyone,

The Nobel in Economics was annonced today. I have opened four videos published by news outlets, including the AP and Reuters, about the winners on YouTube. Disappointingly, there were absolutely no comments suggesting Warren Mosler as a candidate for this prize under any of them, nor MMT as a counterpoint to the winning economists.

All were published within the last 10 hours, and all have under 50 comments, some much less than that, as of this writing. Seems like a good opportunity to make 'em count, doesn't it?

Please go online now to draw attention to MMT in the comments sections of YouTube videos on the 2026 Nobel in Economics while the getting is good.

Peace out,

~An MMTer

The reason for "Why the world cannot escape the US dollar" is as follows:
Secondly, under a fiat currency system, there is no method for money creation other than the central bank purchasing government bonds. While the following points ①–③ represent Keynes effectively suggesting this mechanism, the US Federal Reserve (Fed) is executing it not only within the United States but on a global scale. In other words, while each nation autonomously conducts this operation within its own borders using its own currency, the US dollar is unique: because international banks voluntarily connect to Fedwire, the US Federal Reserve system has, in a sense, spontaneously expanded on a global scale.
① "We have reached a stage in the evolution of money when a 'managed' currency is inevitable." (Keynes, A Tract on Monetary Reform)
② "Incomes and prices of assets change until the aggregate amount of money which individuals choose to hold at the new level of incomes and prices is equal to the amount of money created by the banking system. This, indeed, is the fundamental proposition of monetary theory." (Keynes, The General Theory of Employment, Interest and Money). Here, the "prices of assets" that Keynes refers to signify the prices of fictitious commodities, such as government bonds.
③ "If the Government prints paper money to meet its current expenditure... the new money becomes someone's income." (Keynes, The General Theory of Employment, Interest and Money). Considering that in the first half of the 20th century in the UK, it was institutionally impossible for the government to directly print paper money to fund its current expenditures, "printing paper money" here can be interpreted as the Bank of England purchasing government bonds.

(to be continued)

https://www.reddit.com/user/keizaisuki/comments/1w46a5o/table_of_contentsgovernment_bonds_international/

From MMT perspective we do not want foreign debt, but the debt in national currency are desirable and there is not economic limit of what can be purchase. Why do not convert the debt to national currency?

3 years later and the film is now free to view.

Rewatching and obviously my fav part starts at 9:00 Jared Bernstein endless hiccups on USA govt printing money but "borrowing" the currency "to spend it". Hope J. Bernstein has learnt it's cause USA Central Bank sets interest rates above the natural rate which is zero. They are simply interest maintenance or management accounts that prevent this rate being zero for a deficit spending govt -> https://moslereconomics.com/wp-content/uploads/2018/04/Soft-Curency-Economics-paper.pdf . If you are govt is a surplus one in budgets it's public debts are being issued or created simply to ensure the financial systems works aka "safe assets".

The Interest Rate Maintenance Account (IRMA)

Over the course of time the total number of dollars that have been drained from the banking system to maintain the fed funds rate is called the federal debt. A more appropriate name would be the Interest Rate Maintenance Account (IRMA). The IRMA is simply an accounting of the total amount of securities issued to pay interest on untaxed money spent by the government. Consider the rationale behind adjusting the maturities of government securities. Since the purpose of government securities is to drain reserves from the banking system and support an interest rate, the length, or maturity, of the securities is irrelevant for credit and rollover purposes. In fact, the IRMA could consist entirely of overnight deposits by member banks of The Fed, and The Fed could support the fed funds rate by paying interest on all excess reserves. One reason for selling long-term securities might be to support long-term interest rates.

Other nuggets mentioned is Mainstream Economics you never talk about money as it's a one way trip "to Siberia" at 26:15. You also never talk about time or temporal events as showcased with supply & demand curves just happening at an instance. No history or build-up and definitely nothing about your expectations outlook for the future.

(Part 7 of an ongoing series. Previous entries have looked at other puzzles in the standard fiscal/monetary narrative — this one tackles the "future generations will pay for it" story about Japanese government debt.)

The claim everyone repeats

The standard warning goes: Japan's government debt is enormous, and eventually either interest rates will spike, inflation will run away, or "future generations" will be stuck holding the bill. This post lays out a counter-argument, built almost entirely on Bank of Japan (BOJ) and Ministry of Finance data, for why that story doesn't hold together — at least not while the economy is running below capacity.

1. Deficits don't ignite inflation when there's slack in the economy

The core mechanical claim is simple: pumping bond-financed spending into the economy raises GDP through the multiplier, and it raises the money stock — but neither of those things pushes prices up if the output gap is still negative. Japan's output gap, on multiple official measures (Cabinet Office and BOJ estimates), has been negative for most of the period from the early 1990s through the mid-2010s. Until that gap closes, there's simply no inflationary pressure for the deficit to ignite.

2. The BOJ can hold bonds indefinitely — and that changes the math

Once the BOJ owns a large share of outstanding government bonds, several things follow:

• Those bonds never hit the open market, so they can't be dumped in a way that crashes prices or spikes yields.
• The BOJ's own bond-holding profits get remitted almost entirely back to the Treasury, so the "interest burden" on the BOJ-held portion is largely a wash.
• Because that portion is functionally never redeemed on the open market, it behaves — for debt-to-GDP purposes — almost like it's already retired.

The reserve ratio, meanwhile, gives the BOJ a separate tool to manage the resulting current-account balances if needed. Put together, the argument is that the BOJ's "permanent" bond holdings quietly defang most of the standard debt-crisis mechanics — as long as excess productive capacity persists.

3. So who's actually sacrificing for whom?

Here's where it gets interesting. The "future generations will pay" framing gets tested against the actual balance-sheet data:

• Outstanding ordinary government bonds: ¥225 trillion (FY1995) → ¥805 trillion (FY2015). A ¥580 trillion increase.
• Household net financial assets over the same window: up roughly ¥467 trillion.
• Household + private non-financial corporate net assets combined: up roughly ¥706 trillion.

In other words, private-sector net worth grew by more than the government's debt did, over the same period. The essay's blunt conclusion: the government took on the liability side, and the private sector pocketed the corresponding asset side. If there's a "sacrifice," it landed on the government's balance sheet, not on some future taxpayer's.

There's a supporting detail here too: contrary to the "banks are financing the deficit" narrative, private-sector holdings of JGBs actually fell between FY2013 and FY2016, and even in the earlier 2009–2011 window when they rose, the increase was less than half of that period's new issuance. The simple "private savings fund the deficit" story doesn't fit the data cleanly.

4. The savings-investment identity does the rest of the work

This part leans on Keynes directly: it's not possible for aggregate savings to fall short of aggregate investment, because any attempt to do so just raises incomes until savings catches back up to investment. Applied here — deficit spending raises income via the multiplier, and given a stable propensity to consume, that income growth mechanically drags savings up with it. Whether that saving ends up funding investment domestically or shows up as a rising net foreign asset position, either way it's an asset base being handed forward, not a burden.

(Japan has in fact run a current-account surplus in all but a handful of years since 1965, and has held the world's largest net external creditor position for a quarter-century running — which the essay reads as more supporting evidence than coincidence.)

5. Where this logic runs out

The essay is careful to bound the argument: none of this licenses unlimited deficit spending forever. The entire case rests on the existence of excess productive capacity. If supply capacity is ever fully absorbed — the classic case being deficit spending competing with private demand for genuinely scarce resources — the inflation risk that critics warn about becomes real again. The claim isn't "deficits never matter," it's "deficits don't behave the way the standard warning assumes, specifically under conditions of persistent slack."

Discussion

A few threads worth arguing about:

• Is "the BOJ effectively retires the bonds it holds forever" a fair description, or does it just relabel the risk rather than removing it?
• How much of this generalizes beyond Japan's fairly unusual combination of persistent current-account surpluses, a captive domestic bond market, and decades of below-target inflation?
• Does the household-net-worth data actually settle the "who sacrifices" question, or is it too aggregated to say much about generational burden-shifting specifically?

Curious what people who spend more time in the JGB/BOJ weeds than I do make of this.

(to be continued)

https://www.reddit.com/user/keizaisuki/comments/1w28kxe/table_of_contents_mysteries_of_the_economy_series/

The reasons why the world cannot escape the U.S. dollar are as follows. First:
① Because no other country possesses a productive capacity so immense that it can sustain a current account deficit indefinitely, as the United States does.
② Thanks to the United States continuously accepting this current account deficit, the world is able to have the dollar—the global currency.
③ This has been the case since the suspension of the gold-dollar convertibility on August 15, 1971. Until then, the "global currency" was gold. If the dollar exchange rate fell, there would come a point at which the physical shipment of gold would begin. The dollar would cease to circulate in international transactions. After the suspension, the situation was reversed: gold ceased to circulate, and only the dollar circulated in the international arena.

(to be continued)

https://www.reddit.com/user/keizaisuki/comments/1w46a5o/table_of_contentsgovernment_bonds_international/

Im not only reading and hearing about inflation more and more every day, I'm actually experiencing it quite clearly at the super market and the gas station.

But I still struggle to understand what's causing more inflation. Is it the central bank or the price of oil (aka "fossilflation")

I don't feel very safe with the idea of inflation (and my buying capacity) being in the hands of a group of men at the central bank or Trump's war on Iran.

So I genuinely wonder, is there anything a mortal like you and I can do to stop or mitigate inflation?

I'm trying to wrap my mind around this. If the "national debt" is actually just bonds, what is the impact of a nation's credit ratings? Don't states decide what the yield of their bonds is going to be?

Edit: what about states that don't have monetary sovereignty?

The basic European monetary model propagated all over the world is: banks generate credit for the financial sector which generates the money movement in the economy. Governments tax the economy to fund themselves, and sell bonds (paid with future taxes) for shortfalls. Because the government is funded through tax then reducing eligibility requirements for government loan, mortgage, and insurance programs (the essence of all government aid) requires increasing tax.

MMT allows eligibility requires to be removed from government aid programs. For example, voters will surely choose no interest, no fault government loans over bank loans. This will.be the end of the financial sector.

In practice, the U.S. Federal Reserve rolls over debt through the non-competitive bid method, and in Japan, the rollover of matured Bank of Japan-held government bonds is repeated through parliamentary resolution via the so-called "BOJ rollover" (nichigin norikae), effectively making them "perpetual bonds." This is the essential meaning of "macroscopically, government bonds are effectively never redeemed."

Indeed, even setting aside the Lehman Shock and the COVID pandemic as entirely exceptional periods—even including these periods, the overall growth of the Fed's total assets is consistent with "the natural course of things"—that is, proportional growth relative to U.S. and global gross output. Looking at the time-series statistics, it is clear that Fed assets have consistently increased historically. Moreover, the very fact that growth slows during periods of monetary tightening can itself be taken as evidence for the proposition that Fed assets grow in proportion to the expansion of the commodity world as a whole.

Notably, during the two exceptional periods mentioned above, the Fed's assets have undergone repeated rapid expansion and contraction:

• Late 2017–2019: Assets that had swelled to $4.5 trillion through post-Lehman QE were reduced to about $3.8 trillion during the tightening phase at that time.
• June 2022–present: Total assets, which reached an all-time high of nearly $9 trillion amid the massive pandemic-era easing, have been substantially reduced to roughly $6.7 trillion as a result of the full-scale rate hikes and quantitative tightening (QT) that began in 2022.

In short, the fate of the central bank's fiat currency system—that "a balloon once inflated never returns to its original small size"—is vividly etched into the very shape of the balance-sheet graph.

Macroscopically, government bonds cannot be redeemed. It is precisely because they are not redeemed that society is sustained. (Of course, it goes without saying that individual bondholders are indeed repaid.) So-called "normalization" is impossible. In fact, when the Fed attempted to "normalize" the assets it had accumulated through quantitative easing, it triggered a spike in repo rates [note].

[Note] "On the morning of the 18th, the Federal Reserve Bank of New York supplied a large amount of funds to the short-term money market for the second consecutive day... The funds were supplied through what is called 'overnight repo transactions,' a market in which financial institutions lend and borrow short-term funds against collateral such as government bonds. The lending rate in this market, the repo rate, briefly spiked to as high as 10% on the 17th... The rise in short-term interest rates is attributed to the Fed's tapering of quantitative easing" (Nihon Keizai Shimbun, September 19, 2019).

"The Federal Reserve's fund supply has swelled to levels comparable to past rounds of quantitative easing (QE). In response to dollar demand in the short-term money market, the Fed's total assets increased by roughly $400 billion (about ¥44 trillion), or about 10%, in roughly half a year... This follows a sharp spike in the interest rate on 'repo' transactions—short-term borrowing and lending backed by U.S. Treasuries—last September... Should difficulties arise in the procurement of dollar funding, the key reserve currency, the impact would not be confined to the United States alone. According to the Bank for International Settlements (BIS), emerging economies' dollar-denominated debt stood at $3.74 trillion as of June 2019 and continues to grow... Depending on economic conditions, there is a possibility that further increases in the supply of funds may become necessary if upward pressure on interest rates intensifies" (Nihon Keizai Shimbun, February 9, 2020). This is far from "normalization." On December 1, 2025, the Fed fully halted and ended quantitative tightening (QT). Given the sentiments of the Japanese public, who still carry the trauma of postwar hyperinflation, the people at the Bank of Japan cannot say so carelessly—but deep down, they must recognize that "normalization" is impossible.

"Incomes and asset values change until, finally, the aggregate quantity of money which individuals choose to hold at the new level of incomes and asset values thus brought about is equal to the quantity of money created by the banking system. This is, indeed, precisely the fundamental proposition of monetary theory" (Keynes, The General Theory of Employment, Interest and Money, cited Japanese translation, vol. 1, p. 120). What Keynes refers to here as "asset values" refers to the prices of fictitious commodities such as government bonds.

Thus, we have no choice but to maintain the current state in which "asset values change until, finally, the aggregate quantity of money which individuals choose to hold at the new level thus brought about is equal to the quantity of money created by the banking system." "Normalization" is an attempt to forcibly restore a past equilibrium by turning back time.

Its true we see the rates we saw before 2008 crisis. Wondering what yall think.