The host was soooo certain and sure on what he thought was the source of inflation in his lead-in before the interview. He was either too cowardly to challenge Warren on it, or he rightly deferred to the brighter man in the conversation and kept his mouth shut.
Can people please come over to Huffpost Canada and comment here? This Minister is a well-known idiot, with no economics background and yet he’s getting screen time with this economics piece. It’s a train wreck, but it’s the blueprint this government is about to follow full steam.
A great interview because the interviewers were not pushy.
I have to admit that I am getting convinced more and more that the underlying political issues cannot be addressed by merely increasing the budget deficit. Correct budget policy is merely a NECESSARY not a SUFFICIENT condition of breaking free from the Great Stagnation. The most of the “money” in the global system is used to generate more “money” by the means of speculation and usury. Fixing the unemployment would not benefit the Wall Street guys as it would interfere with their “business model” hence they opt for austerity. Without dismantling the “Wall Street – type” carnivore and cannibalistic financial capitalism a meaningful reform is impossible. Not only the inflow of money should be increased as MMT stipulates but also the leak (excessive saving by the 1%) sealed off. What do the rich need their money for? To run productive enterprises? They need real capital to do it not money. I understand the need for someone smart and innovative to own a factory worth $1bln employing 1000 workers and making useful things for us – good on him, he well deserves his profits and luxurious lifestyle. I am not a communist and I am convinced that this is far more efficient than state-owned bureaucratic monsters.
Having said that I cannot understand what a financial capitalist, a rentier or a money spinner (e.g. a HF trader) can do with his $1bln in financial assets and what’s the social benefit of feeding these vermins. Imagine that the person lives for 50 years – how can one consume $20mln/year? Spend $55k every day? Buy and torch a house every week like Roman Emperor Nero did – just for fun, to watch the wealth burning? The amount of money (not only state liability but claims on current and future goods and services made available by the productive economy) is just insane. We are not talking about Keynesian middle-class savers who have a liquidity preference to money or bonds we are dealing with the monstrous Marxian blood-suckers and mega-debt-peddlers operating on a global scale, bankrupting whole states and destroying whole continents.
This issue also has to be addressed. If not (I doubt it will) then NOTHING will change in the long run, MMT or no MMT.
The issue of whether USD is the global currency can’t be dismissed by saying “this doesn’t matter for the well-being of US citizens”. Maybe for the “99%” it is not relevant in the long run but for the “1%” it matters a lot in the short run. The issue of imperial domination of the US cannot be separated from the corporate interests of American corporations and Wall Street.
What about the critique of the Western system provided by this guy in a very provocative manner?
He reached the same conclusions I did a few months ago that the American democracy is a zombie system almost completely hijacked by the interest groups. The only difference is that I also wrote about absolute property rights as the cornerstone of the Western system together with “democracy” and “human rights”.
This is what I found in the article:
“The fundamental difference between Washington’s view and Beijing’s is whether political rights are considered God-given and therefore absolute or whether they should be seen as privileges to be negotiated based on the needs and conditions of the nation.”
There is an advert of a local Chinese retail network here in Australia saying “Everything is Negotiable” http://www.binglee.com.au/
The Westerners may not understand this simple message – the acerbic comments to that NYT article on many blogs suggest that the cultural divide is too fundamental to be bridged.
Let’s wait 20 years and see who is right. My bet is that the “1% vermins” will slowly die off bringing down some of the “99%” with them as well.
interesting thoughts.
The West may think that political rights are “God-given” but it practices political life where political rights are “money-given”.
God is replaced with money in this case. Rather significant and symbolic.
“In Shanghai, the average 15-year old mathematics student is performing at a level two to three years above his or her counterpart in Australia, the USA, the UK and Europe.”
I have obviously undertaken corrective steps in regards to my children. They are not 2 years behind the Chinese… they study with the Chinese (and other hard-working people), there is a plenty of them living here in Australia.
@Adam (ak) And? So they go to work two years earlier than an American student? They stay two years ahead in math their whole life? I’d be willing to be they were more than two years ahead of where Steve Jobs was at the same age.
I’m not sure what you think this means.
Greg Marquez,
No, you will see the difference at some point in the near future when strange products start arriving from China and nobody in the US will know how they have made them – because of the prevailing ignorance. This is how the West won overt the rest of the world 300 years ago and this is how the East will take the revenge (or rather restore the balance) in the early 21th century. The process seems to be inevitable and I will be in fact very happy to see its conclusion.
Steve Jobs was a brilliant industrial designer and efficient manager but in my opinion a very limited person full of hatred and greed until his very last days (as expressed in the rant about destroying Android for “stealing” his “property”, clearly exposing himself as a psychopath). Is he a role model, a new secular Saint? Good luck…
“I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40bn in the bank, to right this wrong,” Jobs told Isaacson. “I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this.”
…
“I don’t want your money. If you offer me $5bn, I won’t want it. I’ve got plenty of money. I want you to stop using our ideas in Android, that’s all I want.”
The people who did the real job were Alan Turing and the others who worked on hardware, algorithms and programming languages 50-60 years ago. Please tell me what fundamentally relevant has been invented over the last 15 years in the world of IT. A method of clicking an icon on the screen once rather than twice in order to confirm a transaction?
The sick obsession with hoarding wealth and with imposing private property rights extended to the world of information and knowledge is the guarantee of self-destruction of the American culture. A significant group of Americans cannot work together and share their knowledge (they would demand money for their “property) but the Chinese and the others are happy to do so.
it seems to me that the West only wants to keep the military advantage, energy control and money control.
Food and water control will start to play larger role soon.
The Chinese can produce new products, and the West will not worry, as long as they do not upset their military advantage.
“I want you to stop using our ideas in Android, that’s all I want.”
Google DID use their ideas for a phone in Android. The head of Google knew about the ideas because he was on Apple’s board. Google didn’t invent the Android OS. That’s Open Source.
JObs in 2009: “Eric has been an excellent Board member for Apple, investing his valuable time, talent, passion and wisdom to help make Apple successful,” said Steve Jobs, Apple’s CEO. “Unfortunately, as Google enters more of Apple’s core businesses, with Android and now Chrome OS, Eric’s effectiveness as an Apple Board member will be significantly diminished, since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest. Therefore, we have mutually decided that now is the right time for Eric to resign his position on Apple’s Board.”
From TechCrunch: “Many people have always found it strange that Schmidt was on Apple’s board, but back in August 2006 when he took the seat Google had virtually nothing even remotely competing with Apple’s core products and services. It’s only in the last 20 months or so that possible conflicts of interests really became an issue, and we can’t forget that Schmidt was consequently asked to leave board meetings when critical things were shared about Cupertino’s plans for the iPhone and the App Store.”
Schmidt poached.
@Adam (ak), Regarding China, the show aint over til the fat lady sings, or in this case, the fat asian boy, china has stolen everything from us, even our SOUL music has been copied and improved upon, this chinese boy sings Whitney Houston songs better than Whitney. Goodbye America, it was all a dream….
“Google DID use their ideas for a phone in Android.”
And so what? What is wrong with that?
No the Chinese haven’t “stolen” everything yet – the greatest ingenious American invention since golden plates were given to Mr Smith by an angel is still there untouched – the concept of “intellectual property”. This eternal moral truth could have been revealed to another Prophet or rather “Prophit” either in ashram or maybe when he was lying in the gutter after taking some “acid”.
“He’d [Bill Gates would] be a broader guy if he had dropped acid once or gone off to an ashram when he was younger”
More about how money was (not) made from inventions by these who actually made them can be read in this article:
It’s not like Apple used anything learned from PARC. Or Atari. Or HP.
They all helped generate even more group options for this country. Why squabble about the past ones, when the smorgasbord keeps getting bigger & better?
This was the best, the most eloquent Warren’s interview I have heard so far.
I liked the most the part about economy being sales and also about taxes being like a thermostat, and also currency user vs issue explanation.
Great interview!
I just downloaded the free pdf version of your “7 Deadly Innocent Economic Frauds.” It was not properly constructed, and there are pages missing, sections that are cut-off, and so on. It really needs to be re-done, as I imagine more and more people will be downloading it.
Point out some and I’ll check it against my viewer. If you haven’t updated your PDF viewer in a while, you may not see all the content. I can’t fix anything in 7DIF; I can only check your findings to see if the same happens on my system.
Very good.I think for most of us here It seems like you are repeating yourself but the masses haven’t heard all this and you really kept It simple. I bet this doesn’t even make sense for the first time listener because mainstream propaganda has worked for so many years and most never question the unsustainability fairy.
In total agreement. ..everyone needs to get the basic message at first …
The way warren is presenting it now , is much more mainstream friendly than before ..
We use money all the time. We talk about money a lot. Some people even love money — some so much they seem to think, like the Egyptian Pharaohs, that they’ll be able to take it with them. But does anyone really understand what money is? If we actually did understand it, then, in theory, we should be able to figure out how to harness money as a fundamental public good. To explore the subject I turned to Christine Desan, who is doing important and original work. Thanks Chris!! Total runtime forty seven minutes. Quantum meruit.
@WARREN MOSLER…Just saw the repost..late to answer but yes! Thanks.
Dear Mr. Mosler,
May I please ask you a few questions?
As I understand it, all (or almost all) countries must buy oil with dollars–hence they buy our reserves, hence this activity greatly helps keep the value of the dollar up. If the dollar ceases to be the reserve currency, if enough countries trade for oil with other currencies, would this really be a “threat” to the US or to the dollar? Is being the reserve currency of decisive importance to our economy; does it give us a decisive or very important advantage, and if so, how, and if not, how?
I believe you mention that in reality it is the Saudis who set the price of the oil and everyone follows suit. What are the most important forces determining their action? How is it that they are enabled to do that? Do they essentially operate independently of supply and demand? Is it arbitrary? Is is a function of political power plays? Is it in collusion with the US, since the US is the petrodollar?
Why did oil rise so suddenly a few decades ago, and then drop back to ten dollars just as suddenly. What is behind such tremendous swings?
Thank you so much for your attention,
John (I thought I would post these rather than write you, so others could benefit from your reply, if you consider that worth doing).
Uncritical support, protection and subsidy of Israel, including providing aid/defense money to buy Jordanian and Egyptian cooperation in the Israeli suppression of Palestinians.
Manipulating oil flows and rigging prices, by [a] protecting Saudi Arabia (and the Persian Gulf Arab states) in return for Saudi adjustments (up and down) of oil production to assure a high and stable world oil prices, and by [b] limiting oil exports from–and/or preventing sales of oil drilling/producing/refining/pipeline equipment to–countries that don’t cooperate in US control policies, most notably Iraq and post-Shah Iran. (Note: the failure of the U.S. occupation of Iraq has destroyed our 20 years of successful restriction of Iraqi oil exports and, even worse for U.S. control of oil prices, resulted in leasing of huge Iraqi oil reserves to Russia, China and others.)
Recycling of petrodollars via weapons sales to oil-exporting countries like Saudi Arabia, UAE, Kuwait, Qatar, etc. (i.e. countries that cooperate in assuring high world oil prices) and via petrodollar flow to U.S. banking/investment houses and into U.S. Treasury paper.
Additional point: Since the end of WWII, these pillars have been supported and masked by efforts to limit Soviet and Iranian influence in the Middle East and N. Africa.
@Jim, Exports are a cost, imports a benefit, we have to be the smartest nation ever to exist, got those sauds exporting (and soon will find out if they really are the swing producer), got those chinese exporting, getting those south americans to export too (those chilean blueberries at whole foods are great), while we sit around and play videogames all day and chat on blog boards or in warren’s case goof off with the fishes and the boats.
I think we have reached peak civilization though, after whitney houston, its all downhill from here.
@Save America, LOL! ANother 10 THOUSAND posts and 3 million views just in a few more hours, Warren you definitely have a marketing problem, its beyond comment at this point, we have had it, ignorance is bliss.
@Save America, you think MMT should be turned into a video game? or porn? which one gets more views?
1. People will not accept MMT recommendations because they like the illusion of money as objective equivalent of value, useful for wealth hoarding. People like illusions like these presented by religions. What is the difference between believing that a guy was killed 2000 years ago and then started walking again and the stuff they pay so much attention now? Why do these people use Facebook? True, FB is more ephemeral…
2. Even if there is enough traction, MMT will never be accepted by the current leadership of the US, Democratic or Republican. The reason is that an adoption of flexible monetary expansion would mean an immediate end of the Dollar Standard. http://cables.mrkva.eu/cable.php?id=204405
One of the most efficient tools of bullying other nations and tilting the real balance of trade in favour of the US would be flushed down the drain. The Chinese leadership would have zero interest in pegging their currency to USD knowing that any gap in the American aggregate demand caused by the trade imbalance would be instantly filled up by the Treasury and the Fed working together like during WW2.
Long Live Faith in Anything!!!
What’s up with Australia and Canada, who both run surpluses and have growing economies? Isn’t that combination supposed to produce a contracting private sector (because of the governmental surplus?)
I wish some of the big brains here would address that point.
Look at the export position of both countries. They have both, during the time of recent surpluses, been running net export positions. If you are net exporting you can afford to run budget surpluses without your private sector taking on too much debt to maintain growth.
I think that Steve Keen got it pretty much right in terms of qualitative description of this process. NB the bubble hasn’t burst yet but there are first signs of deflation…
@Greg,
Bill Mitchell tweeted about the Oz surplus last night. Look for an exposition on his blog when he gets back home.
they both rely on rising private sector debt for domestic demand growth which started from a very low level but have limits, and their unemployment rates are a lot higher than they should be, and standards of living lower than they should be.
So, what should be the government policy when private sector debt is growing too much? Like in the US in the late 1990’s and mid-2000’s?
In both cases we reduced deficits, even to the point of having surpluses in the 1990’s. That didn’t work. Was it too little, or was it the wrong direction?
Would higher/lower deficits tend to alleviate or exacerbate the accumulation of private sector debt? Should interest rates be adjusted? That is what the Fed did both times, inverting the yield curve. Some say that inverted yield curves always cause recessions. Inconveniently, they also are coincident with lower deficits, which others say always cause recessions.
the main thing we should do is be ready to go in reverse at the first sign of rising unemployment. no point in letting a financial crisis spill over to the real economy
The host was soooo certain and sure on what he thought was the source of inflation in his lead-in before the interview. He was either too cowardly to challenge Warren on it, or he rightly deferred to the brighter man in the conversation and kept his mouth shut.
Go to the 19:35 mark where Warren is introduced.
Can people please come over to Huffpost Canada and comment here? This Minister is a well-known idiot, with no economics background and yet he’s getting screen time with this economics piece. It’s a train wreck, but it’s the blueprint this government is about to follow full steam.
http://www.huffingtonpost.ca/maxime-bernier/recession-spending_b_1279534.html?ref=canada-business
@jason m,
Done! Waiting for moderation, I think.
@Jill Korenaga, saw your post, great!
Excellent! Warren, you have the unique talent to explain in 20 minutes what takes most of us several hours if not days.
thanks!
A great interview because the interviewers were not pushy.
I have to admit that I am getting convinced more and more that the underlying political issues cannot be addressed by merely increasing the budget deficit. Correct budget policy is merely a NECESSARY not a SUFFICIENT condition of breaking free from the Great Stagnation. The most of the “money” in the global system is used to generate more “money” by the means of speculation and usury. Fixing the unemployment would not benefit the Wall Street guys as it would interfere with their “business model” hence they opt for austerity. Without dismantling the “Wall Street – type” carnivore and cannibalistic financial capitalism a meaningful reform is impossible. Not only the inflow of money should be increased as MMT stipulates but also the leak (excessive saving by the 1%) sealed off. What do the rich need their money for? To run productive enterprises? They need real capital to do it not money. I understand the need for someone smart and innovative to own a factory worth $1bln employing 1000 workers and making useful things for us – good on him, he well deserves his profits and luxurious lifestyle. I am not a communist and I am convinced that this is far more efficient than state-owned bureaucratic monsters.
Having said that I cannot understand what a financial capitalist, a rentier or a money spinner (e.g. a HF trader) can do with his $1bln in financial assets and what’s the social benefit of feeding these vermins. Imagine that the person lives for 50 years – how can one consume $20mln/year? Spend $55k every day? Buy and torch a house every week like Roman Emperor Nero did – just for fun, to watch the wealth burning? The amount of money (not only state liability but claims on current and future goods and services made available by the productive economy) is just insane. We are not talking about Keynesian middle-class savers who have a liquidity preference to money or bonds we are dealing with the monstrous Marxian blood-suckers and mega-debt-peddlers operating on a global scale, bankrupting whole states and destroying whole continents.
This issue also has to be addressed. If not (I doubt it will) then NOTHING will change in the long run, MMT or no MMT.
The issue of whether USD is the global currency can’t be dismissed by saying “this doesn’t matter for the well-being of US citizens”. Maybe for the “99%” it is not relevant in the long run but for the “1%” it matters a lot in the short run. The issue of imperial domination of the US cannot be separated from the corporate interests of American corporations and Wall Street.
What about the critique of the Western system provided by this guy in a very provocative manner?
http://www.nytimes.com/2012/02/16/opinion/why-chinas-political-model-is-superior.html
He reached the same conclusions I did a few months ago that the American democracy is a zombie system almost completely hijacked by the interest groups. The only difference is that I also wrote about absolute property rights as the cornerstone of the Western system together with “democracy” and “human rights”.
This is what I found in the article:
“The fundamental difference between Washington’s view and Beijing’s is whether political rights are considered God-given and therefore absolute or whether they should be seen as privileges to be negotiated based on the needs and conditions of the nation.”
There is an advert of a local Chinese retail network here in Australia saying “Everything is Negotiable”
http://www.binglee.com.au/
The Westerners may not understand this simple message – the acerbic comments to that NYT article on many blogs suggest that the cultural divide is too fundamental to be bridged.
Let’s wait 20 years and see who is right. My bet is that the “1% vermins” will slowly die off bringing down some of the “99%” with them as well.
@Adam (ak),
interesting thoughts.
The West may think that political rights are “God-given” but it practices political life where political rights are “money-given”.
God is replaced with money in this case. Rather significant and symbolic.
@Gary,
Just look at the comments on Twitter… Mr Li must have touched the nerve…
“America’s faith-based ideological hubris dooms it to failure. China’s way is better.” @hofrench
https://twitter.com/#!/search/Eric%20X.%20Li
Regarding China – this is also a good paper (I do not necessarily agree with all the conclusions):
http://www.grattan.edu.au/pub_page/129_report_learning_from_the_best.html
“In Shanghai, the average 15-year old mathematics student is performing at a level two to three years above his or her counterpart in Australia, the USA, the UK and Europe.”
I have obviously undertaken corrective steps in regards to my children. They are not 2 years behind the Chinese… they study with the Chinese (and other hard-working people), there is a plenty of them living here in Australia.
@Adam (ak) And? So they go to work two years earlier than an American student? They stay two years ahead in math their whole life? I’d be willing to be they were more than two years ahead of where Steve Jobs was at the same age.
I’m not sure what you think this means.
Greg Marquez,
No, you will see the difference at some point in the near future when strange products start arriving from China and nobody in the US will know how they have made them – because of the prevailing ignorance. This is how the West won overt the rest of the world 300 years ago and this is how the East will take the revenge (or rather restore the balance) in the early 21th century. The process seems to be inevitable and I will be in fact very happy to see its conclusion.
Steve Jobs was a brilliant industrial designer and efficient manager but in my opinion a very limited person full of hatred and greed until his very last days (as expressed in the rant about destroying Android for “stealing” his “property”, clearly exposing himself as a psychopath). Is he a role model, a new secular Saint? Good luck…
“I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40bn in the bank, to right this wrong,” Jobs told Isaacson. “I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this.”
…
“I don’t want your money. If you offer me $5bn, I won’t want it. I’ve got plenty of money. I want you to stop using our ideas in Android, that’s all I want.”
http://www.guardian.co.uk/technology/2011/oct/21/steve-jobs-destroy-android
The people who did the real job were Alan Turing and the others who worked on hardware, algorithms and programming languages 50-60 years ago. Please tell me what fundamentally relevant has been invented over the last 15 years in the world of IT. A method of clicking an icon on the screen once rather than twice in order to confirm a transaction?
The sick obsession with hoarding wealth and with imposing private property rights extended to the world of information and knowledge is the guarantee of self-destruction of the American culture. A significant group of Americans cannot work together and share their knowledge (they would demand money for their “property) but the Chinese and the others are happy to do so.
@Adam (ak),
it seems to me that the West only wants to keep the military advantage, energy control and money control.
Food and water control will start to play larger role soon.
The Chinese can produce new products, and the West will not worry, as long as they do not upset their military advantage.
@Adam (ak),
“I want you to stop using our ideas in Android, that’s all I want.”
Google DID use their ideas for a phone in Android. The head of Google knew about the ideas because he was on Apple’s board. Google didn’t invent the Android OS. That’s Open Source.
JObs in 2009: “Eric has been an excellent Board member for Apple, investing his valuable time, talent, passion and wisdom to help make Apple successful,” said Steve Jobs, Apple’s CEO. “Unfortunately, as Google enters more of Apple’s core businesses, with Android and now Chrome OS, Eric’s effectiveness as an Apple Board member will be significantly diminished, since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest. Therefore, we have mutually decided that now is the right time for Eric to resign his position on Apple’s Board.”
From TechCrunch: “Many people have always found it strange that Schmidt was on Apple’s board, but back in August 2006 when he took the seat Google had virtually nothing even remotely competing with Apple’s core products and services. It’s only in the last 20 months or so that possible conflicts of interests really became an issue, and we can’t forget that Schmidt was consequently asked to leave board meetings when critical things were shared about Cupertino’s plans for the iPhone and the App Store.”
Schmidt poached.
@Adam (ak), Regarding China, the show aint over til the fat lady sings, or in this case, the fat asian boy, china has stolen everything from us, even our SOUL music has been copied and improved upon, this chinese boy sings Whitney Houston songs better than Whitney. Goodbye America, it was all a dream….
“Google DID use their ideas for a phone in Android.”
And so what? What is wrong with that?
No the Chinese haven’t “stolen” everything yet – the greatest ingenious American invention since golden plates were given to Mr Smith by an angel is still there untouched – the concept of “intellectual property”. This eternal moral truth could have been revealed to another Prophet or rather “Prophit” either in ashram or maybe when he was lying in the gutter after taking some “acid”.
“He’d [Bill Gates would] be a broader guy if he had dropped acid once or gone off to an ashram when he was younger”
More about how money was (not) made from inventions by these who actually made them can be read in this article:
http://www.newscientist.com/special/missinglinks
@Adam (ak),
It’s not like Apple used anything learned from PARC. Or Atari. Or HP.
They all helped generate even more group options for this country. Why squabble about the past ones, when the smorgasbord keeps getting bigger & better?
This was the best, the most eloquent Warren’s interview I have heard so far.
I liked the most the part about economy being sales and also about taxes being like a thermostat, and also currency user vs issue explanation.
Great interview!
Agree with Gary – great interview! Clear and simple but not simpler – a four-year old will get it right-away.
thanks! .
Warren,
I just downloaded the free pdf version of your “7 Deadly Innocent Economic Frauds.” It was not properly constructed, and there are pages missing, sections that are cut-off, and so on. It really needs to be re-done, as I imagine more and more people will be downloading it.
@Henry,
Point out some and I’ll check it against my viewer. If you haven’t updated your PDF viewer in a while, you may not see all the content. I can’t fix anything in 7DIF; I can only check your findings to see if the same happens on my system.
@Henry, my copy seems fine.
thanks, michael working on it
Got transcript ?
i don’t
Very good.I think for most of us here It seems like you are repeating yourself but the masses haven’t heard all this and you really kept It simple. I bet this doesn’t even make sense for the first time listener because mainstream propaganda has worked for so many years and most never question the unsustainability fairy.
@Kristjan,
In total agreement. ..everyone needs to get the basic message at first …
The way warren is presenting it now , is much more mainstream friendly than before ..
The Color of Authority
We use money all the time. We talk about money a lot. Some people even love money — some so much they seem to think, like the Egyptian Pharaohs, that they’ll be able to take it with them. But does anyone really understand what money is? If we actually did understand it, then, in theory, we should be able to figure out how to harness money as a fundamental public good. To explore the subject I turned to Christine Desan, who is doing important and original work. Thanks Chris!! Total runtime forty seven minutes. Quantum meruit.
audio at electricpolitics.com
public tool
Hey Warren, did a little post on some of the stuff you were saying in the interview.
Thanks for the great interview.
http://jerrykhachoyan.com/warren-mosler-interview/
well done thanks!!!!!
ok for me to repost it?
@WARREN MOSLER…Just saw the repost..late to answer but yes! Thanks.
Dear Mr. Mosler,
May I please ask you a few questions?
As I understand it, all (or almost all) countries must buy oil with dollars–hence they buy our reserves, hence this activity greatly helps keep the value of the dollar up. If the dollar ceases to be the reserve currency, if enough countries trade for oil with other currencies, would this really be a “threat” to the US or to the dollar? Is being the reserve currency of decisive importance to our economy; does it give us a decisive or very important advantage, and if so, how, and if not, how?
I believe you mention that in reality it is the Saudis who set the price of the oil and everyone follows suit. What are the most important forces determining their action? How is it that they are enabled to do that? Do they essentially operate independently of supply and demand? Is it arbitrary? Is is a function of political power plays? Is it in collusion with the US, since the US is the petrodollar?
Why did oil rise so suddenly a few decades ago, and then drop back to ten dollars just as suddenly. What is behind such tremendous swings?
Thank you so much for your attention,
John (I thought I would post these rather than write you, so others could benefit from your reply, if you consider that worth doing).
Have you read the 7 dif yet?
Regarding oil, here is something interesting by Chuck Spinney:
http://chuckspinney.blogspot.com/p/three-pillars-of-middle-east-policy.html
The Three Pillars of Middle East Policy
Uncritical support, protection and subsidy of Israel, including providing aid/defense money to buy Jordanian and Egyptian cooperation in the Israeli suppression of Palestinians.
Manipulating oil flows and rigging prices, by [a] protecting Saudi Arabia (and the Persian Gulf Arab states) in return for Saudi adjustments (up and down) of oil production to assure a high and stable world oil prices, and by [b] limiting oil exports from–and/or preventing sales of oil drilling/producing/refining/pipeline equipment to–countries that don’t cooperate in US control policies, most notably Iraq and post-Shah Iran. (Note: the failure of the U.S. occupation of Iraq has destroyed our 20 years of successful restriction of Iraqi oil exports and, even worse for U.S. control of oil prices, resulted in leasing of huge Iraqi oil reserves to Russia, China and others.)
Recycling of petrodollars via weapons sales to oil-exporting countries like Saudi Arabia, UAE, Kuwait, Qatar, etc. (i.e. countries that cooperate in assuring high world oil prices) and via petrodollar flow to U.S. banking/investment houses and into U.S. Treasury paper.
Additional point: Since the end of WWII, these pillars have been supported and masked by efforts to limit Soviet and Iranian influence in the Middle East and N. Africa.
@Jim, Exports are a cost, imports a benefit, we have to be the smartest nation ever to exist, got those sauds exporting (and soon will find out if they really are the swing producer), got those chinese exporting, getting those south americans to export too (those chilean blueberries at whole foods are great), while we sit around and play videogames all day and chat on blog boards or in warren’s case goof off with the fishes and the boats.
I think we have reached peak civilization though, after whitney houston, its all downhill from here.
http://www.youtube.com/watch?v=anyOE3RarYA&feature=g-logo&context=G2f09996FOAAAAAAABAA This kid gets 22 THOUSAND posts to ONE video about the new game Minecraft, Warren can only DREAM of that kind of response
Take us out Whitney, crack is wack:
@Save America, LOL! ANother 10 THOUSAND posts and 3 million views just in a few more hours, Warren you definitely have a marketing problem, its beyond comment at this point, we have had it, ignorance is bliss.
@Save America, you think MMT should be turned into a video game? or porn? which one gets more views?
@Save America, I think that we are getting closer…
1. People will not accept MMT recommendations because they like the illusion of money as objective equivalent of value, useful for wealth hoarding. People like illusions like these presented by religions. What is the difference between believing that a guy was killed 2000 years ago and then started walking again and the stuff they pay so much attention now? Why do these people use Facebook? True, FB is more ephemeral…
2. Even if there is enough traction, MMT will never be accepted by the current leadership of the US, Democratic or Republican. The reason is that an adoption of flexible monetary expansion would mean an immediate end of the Dollar Standard.
http://cables.mrkva.eu/cable.php?id=204405
One of the most efficient tools of bullying other nations and tilting the real balance of trade in favour of the US would be flushed down the drain. The Chinese leadership would have zero interest in pegging their currency to USD knowing that any gap in the American aggregate demand caused by the trade imbalance would be instantly filled up by the Treasury and the Fed working together like during WW2.
Long Live Faith in Anything!!!
What’s up with Australia and Canada, who both run surpluses and have growing economies? Isn’t that combination supposed to produce a contracting private sector (because of the governmental surplus?)
I wish some of the big brains here would address that point.
@James Hogan,
I think I can take this one
Look at the export position of both countries. They have both, during the time of recent surpluses, been running net export positions. If you are net exporting you can afford to run budget surpluses without your private sector taking on too much debt to maintain growth.
@Greg, Too bad that fact was left out of the article. The article makes it sound like this “anomoly” is the sine qua non for the falsification of MMT.
@Greg,
Actually Australia had a current account deficit in the period of surpluses. What prevented the GDP from collapsing was a housing bubble financed with private debt expansion.
http://www.tradingeconomics.com/chart.png?s=ehbbar&d1=19970101&d2=20120229
http://www.tradingeconomics.com/chart.png?s=aucabal&d1=19970101&d2=20120229
The “broad money” including banking system deposits clearly shows what happened:
http://www.tradingeconomics.com/chart.png?s=/australia/broad-money-current-lcu-wb-data.html&d1=19970101&d2=20120229
I think that Steve Keen got it pretty much right in terms of qualitative description of this process. NB the bubble hasn’t burst yet but there are first signs of deflation…
@Greg,
Bill Mitchell tweeted about the Oz surplus last night. Look for an exposition on his blog when he gets back home.
they both rely on rising private sector debt for domestic demand growth which started from a very low level but have limits, and their unemployment rates are a lot higher than they should be, and standards of living lower than they should be.
@WARREN MOSLER,
So, what should be the government policy when private sector debt is growing too much? Like in the US in the late 1990’s and mid-2000’s?
In both cases we reduced deficits, even to the point of having surpluses in the 1990’s. That didn’t work. Was it too little, or was it the wrong direction?
Would higher/lower deficits tend to alleviate or exacerbate the accumulation of private sector debt? Should interest rates be adjusted? That is what the Fed did both times, inverting the yield curve. Some say that inverted yield curves always cause recessions. Inconveniently, they also are coincident with lower deficits, which others say always cause recessions.
the main thing we should do is be ready to go in reverse at the first sign of rising unemployment. no point in letting a financial crisis spill over to the real economy
The host is the worst..Skip immediately to 19:30.
forgive me for asking a stupid question, but the DOWNLOAD button is not working for me. how do i make it work?
@Yuu KIm,
You can just put this URL in your browser and it will take you to the download page. When you get there, click on the green download icon.
https://www.yousendit.com/transfer.php?action=batch_download&send_id=1380679674&email=28bf4d26a4106c33c94c4aab5460b1b6
Actually, just click on the URL–it is live–and it will take you to the page. You don’t have to put it in your browser.
Warren, a request? The Oil market as seen by Warren Mosler.
update soon come