You can’t believe how crazy things are in Washington.
Thing haven’t been sound on the money front for a long time. Certainly not since the Fed was created and we left the gold standard.
But thing have gotten crazier than ever. Now people in Washington and their academic minions are working on hyper-inflationary schemes you probably haven’t even heard of!
Like “Helicopter Money.” And “Modern Monetary Theory.” That’s the one Alexandria Ocasio-Cortez likes.
The Fed’s printing press has been destroying the dollar anyway, but now the crazies want to get their hands on it.
We wrote about Helicopter Money a couple of weeks ago HERE. The idea behind Helicopter Money is that if the Federal Reserve has trouble inflating the money supply through the banking system, the government can simply take a step back to the olden days of money-printing and inflate the money supply without the help of banks. It can simply print the money and get the Treasury Department to help shovel at out the doors of helicopters to the people down below.
Using helicopters to drop money on people around the country is only a metaphor for something more sophisticated. While it means using the US Treasury and tax policy instead of the Fed, the end goal is the same: hyperinflation by shoveling more and more dollars of less and less value into the consumer economy.
Milton Friedman discussed this option back in the 1960s. Former Fed chairman Ben Bernanke brought it back to life in a speech in 2002.
But today even Helicopter Money is an old school concept now that there is a socialist juggernaut loose on the land. The newest rage of the something-for-nothing crowd is called “Modern Monetary Theory.”
I was going to say that Modern Monetary Theory (MMT) is not modern, not about money, and not really much of a theory. But then on Friday, an economist named Charles Gave beat me to the punch!
MMT is like a perpetual motion machine. Free college education? Done! Government guaranteed jobs? Of course! The Green New Deal? Free health care? Free universal income? No worries! MMT can provide all that and much, much more.
As long as money is a State monopoly and as long as legal tender laws force people to use the State’s money and pay their taxes with it, the State can simply print whatever it needs to pay for anything it wishes to give away.
Oh, sure, taxes will still exist, but their primary purpose in the MMT future is as a tool of social control. Taxation will be used to force people to behave in ways the State wishes. Otherwise, for the State’s spending, taxes are mostly superfluous. The State can print as much money as it wishes to spend.
MMT is all about consumption. Production, the work involved in the creation of goods and services? Forget about it!
It is so crazy that even big government types like Bill Gates and Warren Buffett can see through it. Even Paul Krugman realizes how crazy it is.
Even so, MMT is all the rage. Academics who should know better (and they would know better if they had studied historical schemes like John Law’s Mississippi Bubble debacle three hundred years ago) are climbing aboard. And politicians, many of whom will subscribe to any scheme that allows them to promise to give things to people and get re-elected, are falling all over themselves to sign up.
MMT hasn’t reached critical mass yet, but I suspect it will soon. Remember the old saying that those whom the gods would destroy, they first make mad.
Protect yourself and profit from the madness of our times with gold.
Call or stop by Republic Monetary Exchange on Camelback, just east of 40th Street. 602-682-GOLD. 602-682-GOLD. RMEGold.com.