Economic & Market Boom Accelerated

When a fringe economic theory goes mainstream and is actually implemented by policymakers you better pay attention. The once-fringe theory in question is called Modern Monetary Theory, or MMT for short.

The assumption behind MMT is that massive government spending helps the economy grow to its full potential, including full employment, and also finance major programs like universal healthcare, free college tuition, and green energy initiatives. Sound familiar?

What about the burgeoning federal debt? Not an issue according to Federal Reserve Chairman Jerome Powell. In an interview on National Public Radio this week Powell said: “Given the low level of interest rates, there’s no issue about the United States being able to service its debt at this time or in the foreseeable future.”

Enter today’s guest, Paul McCulley, who wrote an academic paperback in 2013 titled: “Helicopter Money, Or How I Stopped Worrying and Love Fiscal-Monetary Cooperation.”

McCulley is currently an adjunct professor at Georgetown business school where he teaches a very timely multi-disciplinary course combining law, economics, monetary policy, global finance, and behavioral finance.

I asked McCulley to explain why he believes helicopter money and the unprecedented fiscal and monetary cooperation we are seeing today is so essential, and not an issue.

00:00 Hello
01:10 Intro
04:00 Interview with Paul McCulley
23:35 One Investment
25:16 Action Point

WEALTHTRACK # 1739 broadcast on March 26, 2021

[lenfoxman]

Once again, Consuelo Mack does us a favor! MMT is not a concept forged in experience. I lived through the 70s as an adult. BAD TIMES.
McCulley does a good job of stating the concept clearly. It is certainly a risky theory. Ever since "paper money", everything is based on "faith". Once a currency is devalued to the point of the destruction of that "faith", the world will move to the currency for which there IS faith.
It is certainly playing with fire. I'm 76 years old, for me it doesn't matter. Our younger citizens will be the people who live with the consequences, good or bad. Perhaps, MCCULLEY goes to Vegas? It sure can be fun.

[chemquests]

Finally a guest that’s not whining about inflation

[mdo]

The governments are our saviors from it. As soon as I heard Him bloviate in the first minute I knew that my 26 minutes would be better served elsewhere

[dyqdzyu]

Investing in crypto now should be in every wise individuals list, in some months time you'll be ecstatic with the decision you made today.

[v.zacarovitch]

I hold large amounts of BTC, XRP and ETH so there is no favouritism. Now I am personally certain that XRP has the greatest potential for gains. and only if there is a solution for the escrow to keep Ripple from dumping onto the market. As an investor I absolutely don’t trust CL & BG to represent investors interests.