Venezuela Runs Out of Beer

[David_N]

wait wait wait.

in every thread on this issue mmter's have been spouting off that you can just print as much money as you want
to pay it off. now they are back tracking as fast as they can.

lol.

What?
Which "issue" do you refer to?
Anyways, it is 100% true that a currency issuer can always credit accounts/"print" money. Should they do it at a time when supply is decimated? No. No MMTER ever says this. When the economy is experiencing slow growth, and with a trade deficit/net savings, the government should fill the gap, or the private sector will have to go into debt/reduce its savings. I'm not back tracking at all. Keep up please.

 

[ludin]

What?
Which "issue" do you refer to?
Anyways, it is 100% true that a currency issuer can always credit accounts/"print" money. Should they do it at a time when supply is decimated? No. No MMTER ever says this. When the economy is experiencing slow growth, and with a trade deficit/net savings, the government should fill the gap, or the private sector will have to go into debt/reduce its savings. I'm not back tracking at all. Keep up please.

lol they can't keep a straight argument.
thanks this is just comic relief.

yes you have constantly. just print money who cares there are 0 negatives.
it is basically in every thread.

and yet no country actually does this because they know better it is a stupid idea.

 

[David_N]

they don't create money.

it is a loan that they give the person from their banking liabilities fund. it becomes an asset to the person and a liability to the bank.
nope I didn't agree and even the site explains that it isn't what you think which was the whole point.

that is why you have been backtracking on this left and right.
they can just print all the money they want to pay for whatever it is they need
and there is no consequences for doing so.

they don't create money.

Then you'll have to explain that to the bank of england and everyone else who has examined banking.

it is a loan that they give the person from their banking liabilities fund.

What the hell are you talking about? A bank loans by creating a deposit, it doesn't take from its already held liabilities to do this.

nope I didn't agree and even the site explains that it isn't what you think which was the whole point.

You need to actually look at what the site says before you continue to embarrass yourself.

that is why you have been backtracking on this left and right.

I've been pretty consistent.

they can just print all the money they want to pay for whatever it is they need

They can buy anything for sale in their currency, that is a fact. Should they? Hell, they're already trying. Venezuela is experiencing a variety of problems and their "road to bolivarian socialism" is the reason they're failing, that, along with the way they handle energy and their reliance on one export (oil.)

and there is no consequences for doing so.

If you can quote me or anyone else saying this.. :roll:

 

[David_N]

lol they can't keep a straight argument.
thanks this is just comic relief.

yes you have constantly. just print money who cares there are 0 negatives.
it is basically in every thread.

and yet no country actually does this because they know better it is a stupid idea.

lol they can't keep a straight argument.

I've been consistent.

yes you have constantly. just print money who cares there are 0 negatives.

WHERE THE HELL HAVE ME OR ANY OTHER "MMTERS" EVER SAID THIS???? We do say that when a country is experiencing slow growth and has plenty of supply/potential output with low aggregate demand, the government should deficit spend to fill that gap.

and yet no country actually does this because they know better it is a stupid idea.

Lame argument. Central banks are now out of options and looking towards 'helicopter money.'

 

[eohrnberger]

Venezuela Runs Out of Beer - Hit & Run : Reason.com





Perhaps they should hire MMT advocates to print mountains of cash for them to buy barley.

Oh ****! This **** just got serious. No more beer! :2mad:

 

[ludin]

Oh ****! This **** just got serious. No more beer! :2mad:

this will lead to a revolt. who cares if I am poor and can't find a job and the government controls every aspect of my life, but
DON'T TOUCH THE BEER.

 

[ludin]

I've been consistent.

WHERE THE HELL HAVE ME OR ANY OTHER "MMTERS" EVER SAID THIS???? We do say that when a country is experiencing slow growth and has plenty of supply/potential output with low aggregate demand, the government should deficit spend to fill that gap.

Lame argument. Central banks are now out of options and looking towards 'helicopter money.'

yes mmt has been a lame argument from the beginning in almost every thread it is.
no worries we can just print money. we can just print money we can just print money.
no worries no consequences.

yet in every situation this argument goes out the window and mmt'ers start back peddling.

 

[David_N]

yes mmt has been a lame argument from the beginning in almost every thread it is.
no worries we can just print money. we can just print money we can just print money.
no worries no consequences.

yet in every situation this argument goes out the window and mmt'ers start back peddling.

For Christs sake, QUOTE WHERE ANYONE CLAIMS THERE ARE NO CONSEQUENCES OR WORRIES.

 

[PoS]

Venezuela has a supply problem for a variety of reasons.
1.) They're socialist and rely on oil, which fell. They also are going through an energy crisis when it comes to powering their country. They also decimated businesses and a whole host of other socialist nonsense.

What does that matter to MMT?

A currency issuer that has debt denominated in that currency cannot go bankrupt, unless they choose to.

Right, so you believe Venezuela cannot go bankrupt since they issue debt in their own currency, yes?

What would more spending due to help them when they have nothing to buy with the money?

There's plenty of things to buy, they can issue money to pay manufacturers, right? Keynesians and MMTers believe you should spend your way out of recession, yes?

I'm waiting for you to dig yourself out of this hole you just dug.

 

[David_N]

What does that matter to MMT?


Right, so you believe Venezuela cannot go bankrupt since they issue debt in their own currency, yes?


There's plenty of things to buy, they can issue money to pay manufacturers, right? Keynesians and MMTers believe you should spend your way out of recession, yes?

I'm waiting for you to dig yourself out of this hole you just dug.

What do you mean "what does it matter?" No MMT supporter has ever claimed spending is the answer to a problem created from a lack of supply in a socialist country.
Technically, Venezuela cannot go bankrupt on a debt denominated in its own currency unless they choose to. This is a statement of fact. Venezuela's problems come from the fact that they're socialist, impose price controls, have an energy crisis, rely on one export, ran off businesses, etc..
I'm pretty sure Venezuela has already used the state to seize food production.
You and others continue to argue against an invisible straw man, failing to provide evidence of what you claim MMTERS believe. Spending out of recessions does work for most countries who control their own currency and are suffering from a lack of demand. It doesn't work when a country begins to experience demand pull inflation, which is what is happening in Venezuela. MMT has always recognized this.

 

[fmw]

This is where you need to understand money creation. A government has to spend more then it taxes overall, if it is a currency issuer. Otherwise, how will people have any money? I mean, banks create money when they loan, but that comes with a liability.

Don't even start. I consider the left wing economics to be nonsensically dangerous. Banks don't create money. They loan money that they borrow from the FED. They loan money they earn from profits. They loan money they borrow from depositors. You can say the money they lend from profits is created money. The rest of it - no so much.

 

[David_N]

Don't even start. I consider the left wing economics to be nonsensically dangerous. Banks don't create money. They loan money that they borrow from the FED. They loan money they earn from profits. They loan money they borrow from depositors. You can say the money they lend from profits is created money. The rest of it - no so much.

They loan money that they borrow from the FED.

You're talking about vault cash, banks can't lend reserves. That's why we're not seeing excess lending with excess reserves as of right now.

They loan money they earn from profits.

What? Banks always have more liabilities then assets, liabilities being deposits.

They loan money they borrow from depositors.

False.
http://www.bankofengland.co.uk/publ...lletin/2014/qb14q1prereleasemoneycreation.pdf

You can say the money they lend from profits is created money.

They lend based on the possible return of the borrower, they don't take from their already held liabilities.

 

[countryboy]

Venezuela Runs Out of Beer - Hit & Run : Reason.com





Perhaps they should hire MMT advocates to print mountains of cash for them to buy barley.

They are a sovereign nation with their own currency after all.

 

[countryboy]

MMT advocates tend to be capitalist, not communists.

This is satire, right?

 

[PoS]

Technically, Venezuela cannot go bankrupt on a debt denominated in its own currency unless they choose to. This is a statement of fact.

Awesome, so according to MMTers Venezuela can never go bankrupt. Great, nothing else matters then. I'm sure Maduro will be very happy with this news! Yippee! :screwy

 

[fmw]

You're talking about vault cash, banks can't lend reserves. That's why we're not seeing excess lending with excess reserves as of right now.

No, I'm talking about money the banks borrow from the FED to loan to its customers.

What? Banks always have more liabilities then assets, liabilities being deposits.

And some of those deposits are loaned to customers.

False.

True

They lend based on the possible return of the borrower, they don't take from their already held liabilities.

Of course they do but deposits above reserve requirements are fair game for lending. So are retained earnings (profits).

 

[imagep]

yes mmt has been a lame argument from the beginning in almost every thread it is.
no worries we can just print money. we can just print money we can just print money.
no worries no consequences.

yet in every situation this argument goes out the window and mmt'ers start back peddling.

Can you please show much which post says "no worries we can just print money. we can just print money we can just print money.
no worries no consequences."? I seemed to have missed that post.

 

[imagep]

What does that matter to MMT?


Right, so you believe Venezuela cannot go bankrupt since they issue debt in their own currency, yes?....

Correct. A country that issues it's own money can never be moneyless.

However, it's totally possible that it could miss it's debt payments if it has debt that is denominated in other currencies, or that it could simply run out of other currencies if currency traders don't want to exchange that countries currency for any other currency or if that country constantly runs a trade deficit and if it has to pay for it's international purchases in other countries money.

You have to understand that economics is a complicated thing. You cant sum it up in just a short sentence. That's one of the problems with MMTers, sometimes they try to oversimplify MMT to the point that they sound like kooks.

 

[winston53660]

This is kinda odd but I know I guy that prints money for several countries around the world. And he works for a company here in where I live. But they print it and then ship it off. I'm sure they like getting paid though.

 

[imagep]

You're talking about vault cash, banks can't lend reserves. That's why we're not seeing excess lending with excess reserves as of right now.

What? Banks always have more liabilities then assets, liabilities being deposits.

False.
http://www.bankofengland.co.uk/publ...lletin/2014/qb14q1prereleasemoneycreation.pdf

They lend based on the possible return of the borrower, they don't take from their already held liabilities.

Banks absolutely lend from resererves. thats a MMT myth.

Banks can't lend required reserves. They can and do lend excess reserves.

The reason that some mmters claim that banks don't lend from reserves, is because when a loan is made, and the money from that loan is deposited back into a bank, it creates new reserves, thus making a bank loan never actually reduces the total reserves in the banking system, it actually INCREASES reserves.

However, when a bank makes a loan, and the loan money is deposited in another bank, the lending bank has it's reserve account marked down by the federal reserve (which is proof that banks do lend from reserves) and the bank that gets the deposit has it's reserve account marked up as a result of gaining more deposited money.

 

[imagep]

This is kinda odd but I know I guy that prints money for several countries around the world. And he works for a company here in where I live. But they print it and then ship it off. I'm sure they like getting paid though.

I bet that place has some hell--a-good security.

 

[winston53660]

I bet that place has some hell--a-good security.

:ssst:

 

[David_N]

Banks absolutely lend from resererves. thats a MMT myth.

Banks can't lend required reserves. They can and do lend excess reserves.

The reason that some mmters claim that banks don't lend from reserves, is because when a loan is made, and the money from that loan is deposited back into a bank, it creates new reserves, thus making a bank loan never actually reduces the total reserves in the banking system, it actually INCREASES reserves.

However, when a bank makes a loan, and the loan money is deposited in another bank, the lending bank has it's reserve account marked down by the federal reserve (which is proof that banks do lend from reserves) and the bank that gets the deposit has it's reserve account marked up as a result of gaining more deposited money.

I think we're in agreement here. But I'll try to understand.
https://www.kreditopferhilfe.net/docs/S_and_P__Repeat_After_Me_8_14_13.pdf
Oh, I see your confusion. Reserves are like settlement accounts, they aren't actually used to fund the loan. What we're talking about is the idea that banks take from their reserves to fund loans. This isn't true, obviously.
Reserves are used so when another bank takes a deposit from the first bank, the new bank gets a matching asset with the liability (the deposit.)
Reserves are also used because of reserve requirements and for vault cash, unless I'm mistaken.
But a bank doesn't use reserves to fund its loans. Only to settle with another bank, and that's separate from funding the loan.

 

[DA60]

Technically, Venezuela cannot go bankrupt on a debt denominated in its own currency unless they choose to.

Actually, that is not technically true.

'What is 'Bankruptcy'
A legal proceeding involving a person or business that is unable to repay outstanding debts. The bankruptcy process begins with a petition filed by the debtor (most common) or on behalf of creditors (less common). All of the debtor's assets are measured and evaluated, whereupon the assets are used to repay a portion of outstanding debt. Upon the successful completion of bankruptcy proceedings, the debtor is relieved of the debt obligations incurred prior to filing for bankruptcy.'

Read more: Bankruptcy Definition | Investopedia Bankruptcy Definition | Investopedia

As you can see, bankruptcy can be instigated by creditors. So, if Venezuela gets so far into debt and it's currency becomes practically worthless OR others refuse to accept it as currency, then Venezuela could be forced into bankruptcy by it's creditors.

It is not likely to happen...but it is technically possible (to my knowledge).


The thing to remember about currency is it is only as valuable as others think it is. If all others think it is worthless...it IS worthless.


That is the big problem (imo) that most MMT'ers/Keynesians/Krugmanites seem to fail to grasp...that macroeconomics is more about emotions then anything else.

Macroeconomics is not about science or logic...it is about humanity.

 

[PoS]

You have to understand that economics is a complicated thing. You cant sum it up in just a short sentence. That's one of the problems with MMTers, sometimes they try to oversimplify MMT to the point that they sound like kooks.

Im not a fan of Keynesianism- I think the overemphasis on aggregate demand and monetary actions by governments is looking at economics the wrong way but MMT takes it past the logical extreme, to the point where it has no practical use whatsoever. It all sounds good on paper, but like communism, it really doesnt work.