MMT (modern monetary theory) TMM (total market manipulation)
A tweet by Fidelity’s Jurrien Timmer jogged me back into the reality that for the last year we have been speculating – and very successfully I might add – but speculating nonetheless at the instigation of Federal Reserve policy explicitly designed to create inflation and by extension, speculation.
I responded to his tweet but let’s go all in and make a post about it because I want to entertain myself, if no one else.
A bearish market player either does not understand the subjugation of markets or is willing to wait for the inevitable bust (insert here old saw about irrational markets outlasting your solvency)…
Keep in mind: Money printing doesn’t have to lead to currency debasement or hyperinflation. Consider Japan. The Bank of Japan monetized the latest 100 percentage point increase in debt (since the Great Financial Crisis) with no inflation or yen debasement to show for it so far. pic.twitter.com/yAX53cyVPq
— Jurrien Timmer (@TimmerFidelity) April 12, 2021
…but let us never forget where the speculation came from or why it was promoted.
“There is nothing wrong with your
television set [rational mind]. Do not attempt to adjust the picture [your point of view]. We are controlling transmission [the financial markets]. If we wish to make it louder [more expensive], we will bring up the [funny munny] volume. If we wish to make it softer [cheaper], we will t une it to a whisper [pretend to be hawkish]. We will control the horizontal [rates of interest]. We will control the vertical [price signals]. We can roll the image [roil the markets], make it flutter [you shudder]. We can change the focus to a soft blur [away from that man behind the curtain], or sharpen it to crystal clarity [command your rapt attention to our manipulative goals]. For the next hour [undetermined time period until the macro souffle wheezes, drops and flattens], sit quietly and we will control all that you see and hear. We repeat: There is nothing wrong with your television set [rational mind]. You are about to participate [have been participating] in a great adventure. You are about to experience [have been experiencing for nearly 2 decades now] the awe and mystery which reaches from the inner mind [dark corners of a long-since failed experiment that does not yet know it has failed] to… The Outer Limits.”
Sure, there is no inflation over the long-term (ha ha ha… healthcare, housing, bloated government, taxation, services, etc.). But there has been inflation over the long-term. You see? The inflation has been permitted as needed at every deflationary danger point. It’s the threat of deflation that has brought on the inflation every damn time.
Now, what happens if we get a ‘this time it’s different’ moment? Eh, Beuller? Yield curve control? That worked in 2011 with Op/Twist. Some esoteric manip out of the eggheads’ magic bag of MMT that we’ve never heard of? Or will the economic intellectuals finally run out of working tools as the inflation fails miserably or morphs to something more intense and far worse, like the all too rare Stag?
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