Comments by "Curious Crow" (@CuriousCrow-mp4cx) on "Governments don’t borrow from financial markets" video.

  1. Money is not a proxy. It is money. A share is a proxy for money which you buy with money. But it is not a one-to-one equivalent. Try buying a coffee in Starbucks with a share certificate. A government is not a corporation. Corporations can't issue their own money that can be used by everyone. So your a ology is misleading. I understand that you are trying to look at the situation in terms of *credo*, or credit as faith or belief, which is the basis of money. But market sentiment is about profit that is denominated in money. And you are right, in that if people lose faith in money, the less people will use it. But, as a shareholder, I am very unlikely to try and buy anything with my share certificate, because I will fail. Money is not a share. And corporations never tax their shares. Governments do tax what extra money you get from your shares. And the credibility of a Governments money is its value that others will use it as a medium of exchange for goods and services. The difference lies in the power behind the currency. Taxation is a tool to control the amount of money in circulation, that isn't being productively used. But speculators don't like that. And the battle between governments and speculators about taxation has its own black propaganda about taxation. Because for speculators it's a numbers game. Bigger number in their bank account is everything. The government can't afford to see everything that way, because the consequences on the welfare of everyone and not just the rentierists, is their priority. It's not just about individuals. Human nature can be a danger to humanity, because it can be blind to consequences in pursuit of a goal. And none more so in matters of power and wealth. In americal, ever since 1917, the Debt Ceiling has climbed in real terms. And now the new administration wants to increase it. And to cut taxes. And implement more tariffs, and these are by nature, are inflationary policies. But are you worried about the value of USD? If not, why not? I answering that question, you'll have to look at money as money, and why price inflation is important. Corporations worry about that as it could kill their business. But price inflation doesn't kill governments. it kills those who don't have enough money. Governments have as much money as the people controlling them want. That's why the debt ceiling is not a ceiling; it's an elevator.
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  2. It quite true. Sterling is still a reserve currency, mainly because it owns so many tax havens, whose clients rely on Gilts to fund their financing, along with US Treasuries, and German Bunds. It wasn't the fear of inflation. It was that she didn't tell them beforehand. Truss was paranoid, and it destroyed her credibility, especially as the Tories under Johnson was so much of a circus. Most policies are are quietly outlined to the people that need to support it beforehand. But Truss did not insert herself into such groups not did she share any information with them. It didn't matter that the people who nixed her plan, were the people who would have benefitted from it the most. They had to teach her who's boss. Why? no rules along. Truss didn't understand that key to power. So, by making a god almighty fuss, they killed one to warn a thousand. She was shredded because she didn't understand the rules. Whether we like to believe or not, no budget is a total surprise to the City. Donors don't give their money people they don't trust to deliver, and the City of London were the largest donors to the Tories by industrial sector. But Truss, naively sidelined them, and got rid of people the City liked, because they weren't yes men. The relationship between the Square Mile and the British Government is incestuous. No other chartered corporation has one of their number sit in the chamber in the House of Commons not in the Guest Gallery, but in a seat placed behind the chair of the Speaker. That right is written in the Royal Charter of the Corporation of the City of London. Moreover, the Foreign Office runs the Mayor of the City of London's calender. He goes off on many trips abroad to fly the flag for the City and the UK. Again, no other Royal Chartered Corporation gets that service from the government. And really, the Tory Party choosing Truss over Sunak would have irritated the City as well, as Sunak was a City insider, and an alumni of RBS and JP Morgan. She gave them the bullet with her name in it, by ignoring them. So, they ensured she would fail, by overreacting to her "unfunded expenditure", even though almost all government expenditure is unfunded, especially after Brexit. Second, Milton Friedman assertion that Inflation "is, and everywhere, a monetary phenomenon" isn't borne out by the evidence. Two things: Wage Price Spirals and the Kenyan Random-controlled Trial of helicopter money prove that not only did Friedman overgeneralised his axiom, but that wage Price spirals are rare, and are not persistent. Money & Macro channel reported the findings of the ongoing helicopter money trial that there was zero inflation in the first 2.5 years after the money - $10 million - was given to households chosen at random in a North Kenyan county. And the economic impact was tracked individually as well as regionally. Then, the IMF staff wrote up desk research study on Wage Price Spirals in 2022,where their evidences-based conclusion was that Wage Price Sprials were significant, but short-lived in their impact on the greater economy. Both these studies are a available online, and Money & Macro talks specifically to the reasons why Inflation did not appear. So, the orthodox models you relate are not to be consumed unquestioningly, because the evidence isn't there to support Friedman and no-one has contradicted the IMF paper punished in November 2021.
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