I see, the fact that the "theory" can not reasonably be expected to come near regulating the level of interest is not important because: a) having money to spend is more important and b) printing money in fact does not create inflation. It would be impossible to notice. No one would ever guess.

As in: "There's a jillon dollars in circulation and the interest rates are 5%. We think there needs to be a half of a jillion more for them to fall to 3.5% (or rise to 6%), let's spend (or tax)!"

To explain: "balance of the budget (surplus/deficit) to the exact amount that would induce a certain level of interest" = spend or tax (and thus in the context of this "theory" expand or contract the money supply) so the resulting quantity of money leads to the desired interest rate. Intractable.

This recalibration extends naturally to the 'easy money' he'd have us go after as the "best play in fixed income," especially if issuance increases - that he (conveniently) neglected in his pitch. Instead into alpha you're buying into a balloon. The best time to issue was three months ago. Spreads?

#Markets seek a certain *average* yield on US/sovereign debt meaning if spot rate moves down and Fed reserves pay less the 10y moves up in yield and conversely. Put together fiscal restraint, #austerity and lower rates and arrive at a stagflationary environment - increased risk. #Gold up. #Bitcoin?

"People are sitting in an immense amount of cash." B/c it pays! It's risk-weighed. Qty of money on deposit is a function of both risk and the rate. These diminishing means less money idling. Risk grows both with #tariffs and increased private borrowing. Knowing the level of tariffs isn't a catalyst.

"Listen, if at the end of the day #dollar comes down moderately, #inflation stays reasonably contained, you know, it'll be OK and #US10Y can move up in yield. You know, by the way, it's not impossible for it come down." Wishful thinking? #USD is correlated w/yields. Can it break only "moderately"?

His arguments pure sophistry: "We have to get spending down." And: "companies don't borrow ... nearly as much as they used to ... tech companies fund themselves through cash flow." Clearly if government spends or issues less private sector has to more. This eluded him and proved the case already.

He did say "higher *real* rates" though. Anyway, not issuing at the long end while printing money quite literally means being frozen out of debt markets.

"[No] drop in long term rates ... Market is not going to demand higher real rates across the curve b/c private sector economy can't pay it ... That will cap private sector yields. Treasury yields will push up against that a bit. But overall that's an env where HY FI continues to outperform."

This lands him right in the hokum of #ModernMonetaryTheory. Short rates move up too, or money supply and #inflation grow. There's no such thing as a free lunch. Only for his buddies.

Ultimately then, if all debt were zero maturity he'd have to roll it all constantly and that'd mean rolling $30T of debt a week instead current rate of close to $600B (that's deemed too much).

That'd be a waste of effort, creating a two track economy: providing the free services and profits economy outside it. Result as #EU: stagnation nearing collapse. Progressive taxation of profits and #UBI are needed on global level. But, all mayors should be democratic socialists. Big congrats again!

Free buses, child care, etc. are not #socialism. Instead, it's a public sector monopoly on ownership, profits. In my view solution is to redistribute future profits in some parts. Herein lies the danger: that #Dems will provide some free services and stop there, claiming this is "enough socialism."

It's sad, though, #MAGA zealots and BBC both try to smear, lessen or explain-away the win. He won b/c of playing music, good campaigning. Sherrill's 'happy' to work with Trump. No, there is no normalising fascism and they won b/c people want change! #SackAnthonyZurcher

www.bbc.co.uk/news/live/cg...

Lower taxes for the affluent mean precisely that they need to work less to sustain their standard of living and therefore limit the output of society. It's the difference between a doctor seeing a few patients more or less. With #UBI the dynamic of supply/demand experiences a parallel right-shift.

I think that understanding is backwards. Isn't capitalism about sustaining oneself by means of investment? Resources are owned and only people whose portfolio isn't sufficiently profitable are forced to work to acquire claims on resources to support their livelihoods.

Real earnings growth ex. valuations is much lower and in fact should valuations decline this'd have a negative effect on earnings going forward.