in other words:

1. Wealth creation in the private sector is limited by resources AND money.

2. Wealth creation in the public sector, which issues the nation's currency, is limited only by available resources, NOT money.

3. The division of wealth creation in the private and public sectors should be chosen by the electorate, not wholly determined by "invisible hand" private sector markets.

Frank wrote on Dec 2^nd, 2022 at 11:00am:


The central bank of Venezuela must have printed too much money, violating the first principle of MMT, namely, public sector money creation is limited by the nation's productivity and available resources.

The drop in the price of oil was a major factor: (wiki)

While some claim that liberalization was the cause of Venezuelan economic difficulties, an over-reliance on oil prices and a fractured political system have been identified to have caused many of the problems.[25] By the mid-1990s under President Rafael Caldera, Venezuela saw annual inflation rates of 50 to 60% from 1993 to 1997, with an exceptional peak of 100% in 1996.[23] The percentage of people living in poverty rose from 36% in 1984 to 66% in 1995,[26] with the country suffering a severe banking crisis in 1994. In 1998, the economic crisis had worsened, with GDP per capita at the same level as it was in 1963 (after adjusting 1963 dollars to 1998 value), down a third from its peak in 1978; the purchasing power of the average salary was a third of its 1978 level.[27]

In other word's the nations' productive capacity was in effect reduced because the value of its production (productivity, measured mainly in oil) and hence ability to pay for imports was slashed.

This shows the need for an international institution to assist nations faced with this type of problem (caused by over reliance of an export commodity).   

Interestingly, the Oz government has decided to introduce price caps on coal and gas, in order to shield households and businesses from soaring energy prices.

In effect, energy costs of households and businesses will be subsidized by the government, funded by taxation and borrowing.

The price caps will be set at levels allowing the energy producers to continue to make reasonable profits, though of course the producers are screaming like cut snakes....

Government says price caps will reduce inflation, whereas distributing the proceeds from a windfall profits tax on energy companies would increase inflation.

Probably true: we saw the inflationary effects of government throwing money at consumers and businesses who did not need it, during the pandemic.  Government should simply have paid the essential bills of locked-down workers and businesses, funded by direct debt-free money creation in the central bank. 

No money at all should have been deposited in workers' and businesses' own accounts, the government should have directly paid the bills for essential living expenses (food, housing, utilities).

At present, of course, government must raise money by taxation or borrowing from private sector financiers.

And even if the government sells bonds to the primary bond market dealers and then immediately buys the bonds back, there is no doubt still commission fees involved.

The middle men - the primary bond market dealers who on-sell government bonds - need to be cut out of government financing activities, so government CAN directly finance its own spending. 

Note this from Ross Gitttins:

"Philip Lowe at an appearance before a parliamentary committee last year,  replied to a question from Adam Bandt  that he would "push back" against any assertion the Reserve was "financing the government" (when the CB was buying $20 billion a month during the start of the pandemic, to fund locked-down workers' ongoing bills).

Gittins comment: "note the peculiar wording: not that the CB should (finance the government), but that it already was".   

The inference being Lowe is part of the cover-up re government financing.

thegreatdivide wrote on Dec 10^th, 2022 at 12:21pm:


Yup - instead of paying the out of control due to the Robber Baron economy prices directly - the people will be paying them indirectly... and the companies will still be receiving far too much for the basics of life ande exploiting to the max.

Philip Lowe should be sacked. 

https://www.project-syndicate.org/commentary/fed-interest-rate-increases-counter...

"All pain and no gain from higher interest rates".

Joseph Stiglitz.

thegreatdivide wrote on Nov 28^th, 2022 at 4:57pm:


Actually that's not true!

Both public and private sectors TODAY rely on resources and productivity in order to create wealth.

From Walther Mathilde@AynRand_is_Dead


https://twitter.com/i/status/1605871182950998016



"America is never going to repay it debt, it doesn't have to, its debts are in its own currency, we can simply print the dollars." 

"Africa's debt is not in its currency, the African debt is in $US dollars, Africa has to earn the US dollars".

"The principle underlying the World Bank is that no country should grow its own food; Africa should only grow export crops which the US and EU needs".


"The most evil institutions in the world today are the World Bank and the IMF" (aka 'Instant Misery Fund' by MMTers...).

https://www.sbs.com.au/news/article/out-of-touch-rishi-sunak-criticised-for-aski...

'Out of touch' Rishi Sunak criticised for asking homeless man if he 'works in business'

Interestingly, the Global Times reports the question asked by Sunak as: "would you like to work in finance"

GT: "Sunak's exchange with the homeless man began when the man asks Sunak if he's "sorting the economy out."

When the homeless man then says he is interested in business and finance, Sunak replies that he used to work in finance too, before asking: "Is that something you would like to get into?"


Note: ex-Goldman Sachs' banker Sunak referring to "finance", rather than business,  ie the funny money casino finance industry, rather than business in the real economy which involves resource mobilization, not crooked money mobilization. 

But Sunak should be criticized for a question he did ask, not one he didn't ask....obviously Sunak wouldn't be asking a homeless man "if he works in business".