Myles, thanks for your nice article. Please allow me to disagree with you though. Theoretically, the market is supposed to be efficient; however, human beings are intrinsically emotional, irrational and biased. It’s very likely that some ‘weirder’ or ‘crazy people’ or ‘party pooper’ turn out to be right. Those who claim that the market is overvalued, or that governments won’t be able to service the debt are supposed to be right according to classical analysis; but they underestimate the role central banks and governments play, and the effects of USD hegemony. At this point, investors are clamoring for treasuries, but what if the debt keeps growing at a rapid pace? MMT does claim that government debt is different from private debt, but it could not be issued to the point of hyperinflation. For sure, the rest of the world would be screwed before the US is over, as long as USD is still the reserve currency, and the US remains the most developed country in the world. Higher asset prices is bad news for those who don’t own assets yet, the inequality results from that is dangerous. Not sure whether I get what you are saying, and things are open for debate for sure. 🙂
Myles, thanks for your nice article. Please allow me to disagree with you though. Theoretically, the market is supposed to be efficient; however, human beings are intrinsically emotional, irrational and biased. It’s very likely that some ‘weirder’ or ‘crazy people’ or ‘party pooper’ turn out to be right. Those who claim that the market is overvalued, or that governments won’t be able to service the debt are supposed to be right according to classical analysis; but they underestimate the role central banks and governments play, and the effects of USD hegemony. At this point, investors are clamoring for treasuries, but what if the debt keeps growing at a rapid pace? MMT does claim that government debt is different from private debt, but it could not be issued to the point of hyperinflation. For sure, the rest of the world would be screwed before the US is over, as long as USD is still the reserve currency, and the US remains the most developed country in the world. Higher asset prices is bad news for those who don’t own assets yet, the inequality results from that is dangerous. Not sure whether I get what you are saying, and things are open for debate for sure. 🙂