Modern Monetary Theory - MMT

[divs4ever]

they will be merged ( too soon for some )

 

[Captain_Chaza]

you should have a battery back up for a serious system ( up to five days worth so as you can send an expert to bring it down gently ) so not so easy , AND your rogue system might have learned more skills than accuracy and honesty ( because it is interacting with the artifacts of human activities , moral and not )

( what if your AI links up with SIRI , or your smart phones to 'monitor ' you and others )

after all intelligent suggests curiosity and creativity ( and adaptability )

WHAT IF?

CRIKEY!
This Thread Is A Lot of Palaver?? IMHO
I don't know what they are all talking about

Can you please cancel my subscription to this thread
It is a total Insult to my Intelligence

All Ii am saying is
PLEASE! LEAVE ME OUT OF THIS THREAD
and it's future Email trash
I Beg You!

 

[3 hound]

WHAT IF?

CRIKEY!
This Thread Is A Lot of Palaver?? IMHO
I don't know what they are all talking about

Can you please cancel my subscription to this thread
It is a total Insult to my Intelligence

View attachment 141380

Aye Aye Captain.

 

[Captain_Chaza]

UNDER EDUCATED or OVER EDUCATED

You be the Judge!

 

[divs4ever]

well i haven't sailed but i would going to the chart-room and working out where the shore is , and if there are any rocks about , and making sure the hatches were secured

looks a bit squally to me

 

[mullokintyre]

MMT gets a bath from Zero hedge.
I realise there are some who regard Zh in the same way as others view the evil murdoch press, or the spectator, or the guardian, or WAPO, or Fox News ..., but debate the message, not the messenger.

Several days ago, around the time of Friday's historic, largest-ever BOJ intervention in the FX market, we pointed out something which almost nobody had noticed: the BOJ's Yield Curve Control had already failed on several occasions, with 10Y yields crossing well above the 0.25% Yield-Curve Controlled barrier...
... and that Kuroda was valiantly injecting trillions of yen in the financial system to defend a barn door that has already been blown open.
But one person did notice what was quietly going on below the unmoving surface of the JGB market, where the BOJ now owns more than half of the entire Japanese bond market and where days can pass without a single trade crossing: that person is DB's FX strategist George Saravelos and in his Monday FX blog titled "Broken", writes that "the below chart shows something striking: the Bank of Japan’s yield curve control policy is, for all intents and purposes, already broken. Only the three 10-year government bond yields that are now eligible for the BoJ’s fixed rate buying operations trade at or below the 25 basis point yield cap. Bonds maturing on either side of the targeted maturity now trade with yields materially higher than the cap."
Of course, just because YCC is broken doesn't mean it couldn't be far worse. Or rather, far, far, far, worse.

As Saravelos explains "if it wasn’t for the Bank of Japan's unlimited fixed rate tenders and broader QE, the entire Japanese yield curve would likely be significantly higher." But the “broken” curve not only demonstrates the scale of policy distortion but its likely limits too: according to the FX strategist, with the Bank of Japan reaching near-full ownership of those three specific bonds, the time is soon approaching where these bonds will stop trading in their entirety and the market will simply cease to exist.

Yes, with the BOJ owning all of the fulcrum securities of the JGB bond market, that will be game over for the world's foremost MMT experiment. At that moment of singularity, there will be no willing seller of ten-year bonds at the Bank of Japan’s designated purchase "price".

As for the idiocy that is the BOJ's continued intervention in the FX market, here Saravelos agrees 100% with us when he says that FX intervention from the Japanese authorities will not work when the move higher in USDJPY is driven by Bank of Japan policy itself!

Indeed, it is either the BoJ or the broad USD anti-risk parity dynamics that need to shift to change USD/JPY direction. So long as neither is materializing, FX intervention looks completely futile – especially if it ultimately leads to foreign exchange reserve sales which ultimately push global yields even higher.

The question then becomes: since the JGB market is effectively dead, does it not make sense for the BOJ to formally and fully nationalize the bond market, and to at least allow the yen to trade (somewhat) freely? Of course, with the entire Japanese financial experiment now counting down to extinction, at best Tokyo will buy itself a few months time, but as any terminal cancer patient will attest, those few last months are more valuable than anything.

While such a revolutionary reassessment may eventually happen, it won't be tonight because one day after the BOJ unleashed its biggest - and most futile - FX market intervention in history, selling some $50 billion in US reserve to buy worthless funny-money, it also offered to buy more bonds than planned at its regular market operation on Wednesday to continue the Kabuki theater that its YCC is still functioning.

• BOJ will buy 575b yen of 3-to-5 year notes, vs 475b yen planned
• BOJ will buy 650b yen of 5-to-10 year debt, vs 550b yen planned
• BOJ will buy 350b yen of 10-to-25 year bonds, vs 250b yen planned
• BOJ will buy 150b yen of debt due in 25 years, vs 100b yen planned

Translation: one day the BOJ does everything in its power to prevent the yen from imploding, the very next day it does, well, precisely the opposite as it unleashes the yen firehose assuring new record lows for the doomed currency.

Idiocy? Yes. But once you are in the endgame of MMT and helicopter money, that's all you have left.

Interesting, I will be watching the BOJ /bond market with a little more attention.
Mick