Modern Monetary Monopsony Theory (MMMT): First Mover’s Advantage
“We have to refine our monetary policy framework.” (Gita Gopinath)
Summary:
· The “Manchurian Candidate” is an appeaser.
· Wealth is being transferred rather than multiplied by the Chinese banking sector.
· Mr. Market accepts the IMF’s prognosis that inflation is too high to allow Modern Monetary Monopsony Theory (MMMT).
· The recently (marked-to-market) solvent BOJ demonstrates the precedent for the panacea of Modern Monetary Monopsony Theory (MMMT).
Extracts
· The PBOC’s latest Reserve Requirement Ratio cut, removes more “safe assets”, from the Chinese banking system, thereby, sustaining pressure on the “Asian Debt crisis rinse and repeat” trigger.
· In response, to the PBOC’s latest Reserve Requirement Ratio cut, the banks will cut their liabilities and shrink the money supply.
· The reduction of Chinese bank liabilities, in the form of deposits, is, in effect, a bank run rather than an attempted consumption stimulus.
· Chinese fiscal policy will not take up the heavy economic lifting burden from the banking sector.
· The aging Chinese consumer will prefer liquidity, over consumption, and, over speculation, in the absence of fiscal and monetary policy stimulus.
· The shrinking Chinese money supply will, ultimately, bring deflationary support, for the Yuan, but, at the large economic cost, of recession, to the real economy.
· With no prospect of fiscal or monetary policy stimulus, in sight, increasing political uncertainty, and the risk to the leadership is being addressed with purges to consolidate loyalty/control.
(Source: the Author)
· The IMF believes that inflation is still too high to embrace MMMT.
(Source: the Author)
· The “Ungoverned Kingdom” (UK) is “Ungovernable”, and “Uninvestable”, nationally and locally.
· Fiscal austerity, at the national and regional level, in the “Ungoverned Kingdom” (UK), is politically unacceptable in a general election situation.
· Politically unacceptable fiscal austerity, in the “Ungoverned Kingdom” (UK), will lead to the acceptance that the “Ungoverned Kingdom” (UK), structurally, “turned Japanese”, last year, when Lizzo had a go at “Kwasinomics”.
· Since the systemically important, and insolvent, UK banks are effectively nationalized, the next financial crisis will hit the NBFIs.
· Deputy Hauser, of the insolvent Bank of England, is preparing the precedent for Modern Monetary Monopsony Theory (MMMT) to bail out the insolvent NBFIs.
· The Bank of England is the first adopter of the next round of Modern Monetary Monopsony Theory (MMMT).
· Britons are the useful idiots that US home flippers were, in the GFC, to enable the next global credit expansion.
(Source: the Author)
· Governor Kuroda confirms the Key Signals translation of Higher/Tighter for Longer as MMMT Forever.
(Source: the Author)
· The “Ungoverned Kingdom”(UK) is not creating enough economic growth to sustain its current national debt, and the Bank of England’s realized losses on QT sales, plus Tory vote-buying pre-election tax cuts.
· The “Ungoverned Kingdom” (UK) is at the threshold of, officially, turning Japanese by adopting Modern Monetary Monopsony Theory (MMMT) policy.
· Elected lawmakers, in the “Ungoverned Kingdom” (UK), have finally admitted to turning Japanese and advised the Bank of England to follow suit.
· Given the “Ungoverned Kingdom’s” (UK) innate inflation tendencies, Sterling weakness, due to MMMT, needs to be managed with extreme caution.
(Source: the Author)