Modern Monetary Theory part 1: currency debasement

MMT advocates currency debasement. Proof of this is given by the MMT proponents (the ‘MMTers’) themselves by their proposing the use of taxation to then control inflation.

That is the very first point about MMT that should be grasped. Currency debasement occurs by ‘printing money’. The MMTers say that the Government monopoly on the currency issue means it can print money to finance its own expenditure. Then tax can be used to control inflation.

You may have seen this written as the breakthrough idea – that Governments actually are not bound by the need to finance expenditure via borrowing and/or taxation. The deficit doesn’t matter, they say. This is meant to be the whole new (hence ‘modern’ nomenclature) understanding. I hate to pour cold water on the naming of the theory, but currency debasement is not new or modern. It is as old as currency itself. From shaving off the outer thin layer of the coinage in Roman times to melt down the silver while the coin retained its face value, to printing counterfeit bank notes, to quantitative easing – currency debasement has been a problem ever since day 1.

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Renewable energy – a futile decades long experiment with other peoples’ money

Reliable energy generation from renewable sources (solar, wind and hydro) has proven unattainable. Despite decades of trying, decades of subsidizing renewable energy projects using other peoples’ money, they can never work. Australia has one of the world’s largest supplies of cheap reliable proven energy: coal. Yet Government action is actively killing the coal industry to give a leg up to renewable projects. It may well end up killing the coal industry and smashing the standard of living of Australians. But we can say with certainty, that reliable energy cannot be generated by solar, wind or hydro facilities.

The serious situation of the Three Gorges Dam

In case things were not bad enough already in China, there is a serious situation rapidly turning into the risk of a catastrophe with the Three Gorges Dam. In brief, its structural integrity appears to be compromised. Combined with very high rainfall in the catchment area of the Yangtze River, the Dam is buckling and the authorities are releasing as much water as is possible to take the pressure off. But it might not be enough. Should the dam fail, it would cause a catastrophe in China.

The first impact would be humanitarian. Millions of people live and work downstream of the dam. Casualties would be large in number. The second impact would be local economic wipe out. The third would be international economic consequences. The fourth impact would be political reprisal. This is not looking good.

Move along, buddy, you’re holding up the line.

It’s time to get back to the business of life, if only our political masters would permit us. There is nothing to see anymore. The media fascination with counting each new COVID-19 case ought to be over.

What is notable from the next two charts is the shape of the curves. First, some larger countries and secondly smaller, (just to make the data easier to see).

Conclusion: the daily deaths have been falling everywhere, even bad boy Sweden, since the peak in late April. This is despite the rapidly growing number of reported cases globally for the last month.

Next, look at the excess deaths from the continuous mortality study, Euromomo, with 24 participating countries:

Conclusion: the spike in deaths, relative to normal, was 4 months ago. Also notable is that there is a spike in deaths every European winter. In 2017, the excess deaths reached 70,000 per week. In 2018 and 2019, they reached 60,000-65,000 per week. In 2020, there were two spikes: the ‘normal’ winter spike around 60,000 per week and then the COVID-19 spike reaching 90,000 per week.

Time to get back to living, working, schooling, business, socialising and recreation.

Perspective

Where is the global panic about deaths from road accidents? Or HIV/AIDS? Or tuberculosis? Why is COVID-19 worthy of a 6 month on-going panic when TB doesn’t rate a mention?

Currently, the global total death toll from COVID-19 is 562,000 people. Round that out to 0.6 million.

In other news, annual deaths from road accident trauma total 1.2m people, tuberculosis also kills 1.2m people annually and HIV/AIDS is killing about 1m people each year. Each and every year.

Let’s tally up the score over the last three years in terms of aggregate deaths:

  • Combined road trauma, TB and HIV/AIDS: 10.2m deaths
  • COVID-19: 0.6m deaths

Why weren’t economies busted and free people locked down years ago?

Photo by Tobias Rehbein on Pexels.com

A bewildered man under pressure

This is the picture of a man under pressure. He looks bewildered.

Victorian Premier, Daniel Andrews, 7 July 2020

He has just announced the reintroduction of hard lockdown rules to apply to all of metropolitan Melbourne and one neighboring municipality. Back to square one. Covid19 lockdown strategy, here we go again in the State of Victoria.

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