The thing that hath been, it is that which shall be; and that which is done is that which shall be done: and there is no new thing under the sun. ~ Ecclesiastes 1:9
I think King Solomon’s words about nothing new being under the sun are just as profound today as when they written almost 3000 years ago.
The reason why is because human nature does not really change. As Twain said, “History doesn’t repeat itself, but it often rhymes.”
I believe these quotes are prescient today as we enter unknown monetary and government interference into the economy. This is being done because of the self-inflicted destruction caused to the economy by the wuflu.
One of the ideas that is gaining traction is the idea of Modern Monetary Theory.
I would like to link to an article written by our acquaintance Harris Kupperman at his blog “Adventures In Capitalism”.
I share his view that MMT is inevitable regardless of what I think. It is our job to understand where the zeitgeist is going and position ourselves to take advantage of the reality that is coming.
My good friend Kevin Muir from Macro Tourist (I highly recommend that you subscribe) has been banging on about Modern Monetary Theory (MMT) for ages. I’ll admit, some of his pieces have been difficult to read as I’m firmly planted in the Austrian school—I believe gold is money and everything else is fiat. I believe governments create inefficiency and corruption while politicizing common sense ideas. I am against MMT in all of its insidious forms as it only legitimatizes all that I disagree with. With that out of the way, I’ve matured enough to know that what I think doesn’t matter. My job isn’t to stake the moral high ground; it is to make money for my hedge fund clients by noticing trends before others do. While I disagree strongly with MMT, Kevin has been right to repeatedly educate himself and his readers on MMT because it’s coming (whether or not you want it).
He goes onto to quote from an article on MMT by Kevin Muir.
You might think MMT to be a crock. It might make every bone in your body shudder. You might feel sick to your stomach as you read the theory. These are just a few of the responses I have heard from traditionally trained hard-money types who learn about MMT.
I suspect most of you know that I am open-minded to many aspects of MMT, but expect it will be taken too far – just like monetarism has been taken too far.
When I see the extreme monetary policy of Europe and other countries with negative rates, all I can ask is how can anyone claim with a straight face that monetarism is working for us? So yeah, I would rather try something new than continue down the current road of easier and easier monetary policy.
Yet, what you or I think about a particular economic policy doesn’t mean squat. I am not here to debate what should be done, but what will be done.
So let’s put aside the economic merits of the different schools of thought, and focus on discounting their probable implementation.
I suggest you read the article and familiarize yourself with MMT. It is where we are going over the next decade of so. It is more nuanced than just “printing more money” but in the end it is the same old story of trying to get something for nothing wrapped in the veneer of “peer reviewed papers”.
As I said before nothing new really happens and the idea that a bunch of technocrats can push the buttons and pull the levers in the right sequence and make everything unicorns and rainbows has been tried and failed.
Check out the video on Youtube “Engineer’s Plot | The Tyranny of Scientism” about the Soviets attempt at this.
Anyway, this is coming whether you want it too or not. Best prepare and skate to where the puck is going, as Wayne Gretzky used to say.
To your investing success,
John Polomny
Editor
Actionable Intelligence Report