Milei is pledging economic shock therapy, including shutting the central bank, ditching the peso and slashing spending. His challenges will be enormous: Empty coffers, a $44 billion debt program with the IMF, 150% inflation and more.
“…tying a State’s sovereign fiat money to a commodity belongs in the dustbin of history.”
I’ve got to ask, what makes you say this? Especially when scarcity is one of the most critical properties of money, and the governments of the world have shown their willingness to print money infinitely. Which makes modern, unbacked, Fiat currencies virtually worthless in the long run.
The value of a State’s fiat money comes from them requiring that taxes be paid in that same money. Yes they can print as much money as they want, but they don’t, and they can regulate its value by destroying some of it through taxation.
Second Thought: Why The Government Has Infinite Money
I watched the video, it’s information I’m well aware of. This video presents theories that ignore critical aspects of our monetary system. For example this analysis fails to consider the cascading effect of interest payments on the accumulated debt. Which are approximately one trillion dollars per year at the time of me posting this.
Furthermore, the government doesn’t need to borrow money in the first place, because again, it can print as much as it wants.
So you might ask, why does our government create these treasury securities in the first place? I think the answer is largely twofold. Firstly as another tool for managing inflation. By giving the wealthy a safe place to profitably park their money, that money is temporarily removed from the real economy. Secondly because those same wealthy capitalists are the ones calling the shots in the first place, and they want a safe place to profitably park their money.
“…tying a State’s sovereign fiat money to a commodity belongs in the dustbin of history.”
I’ve got to ask, what makes you say this? Especially when scarcity is one of the most critical properties of money, and the governments of the world have shown their willingness to print money infinitely. Which makes modern, unbacked, Fiat currencies virtually worthless in the long run.
The value of a State’s fiat money comes from them requiring that taxes be paid in that same money. Yes they can print as much money as they want, but they don’t, and they can regulate its value by destroying some of it through taxation.
Second Thought: Why The Government Has Infinite Money
Here is an alternative Piped link(s):
Why The Government Has Infinite Money
Piped is a privacy-respecting open-source alternative frontend to YouTube.
I’m open-source; check me out at GitHub.
I watched the video, it’s information I’m well aware of. This video presents theories that ignore critical aspects of our monetary system. For example this analysis fails to consider the cascading effect of interest payments on the accumulated debt. Which are approximately one trillion dollars per year at the time of me posting this.
If they can print as much money as they like then they obviously they can always make any interest payment, as former Fed. Chair Alan Greenspan himself has plainly stated.
Furthermore, the government doesn’t need to borrow money in the first place, because again, it can print as much as it wants.
So you might ask, why does our government create these treasury securities in the first place? I think the answer is largely twofold. Firstly as another tool for managing inflation. By giving the wealthy a safe place to profitably park their money, that money is temporarily removed from the real economy. Secondly because those same wealthy capitalists are the ones calling the shots in the first place, and they want a safe place to profitably park their money.
Here is an alternative Piped link(s):
former Fed. Chair Alan Greenspan himself has plainly stated
Piped is a privacy-respecting open-source alternative frontend to YouTube.
I’m open-source; check me out at GitHub.
“those same wealthy capitalists are the ones calling the shots in the first place”
That’s a good reason to take money out of the hands of the state.