Keynes is dead; this is the long run
“Of course, the name is something of an oxymoron; there is really nothing modern about this monetary theory. Confusing money-creation with wealth creation was at the core of the debate between John Law and Richard Cantillon 300 years ago. For Law (a Scot who fled British justice, took refuge in France, and within a few years managed to drive what was then the leading economic power of the day into near bankruptcy), increases in the supply of money would lead to the employment of unused land and labor, which in turn would lead to higher productivity. Meanwhile, Cantillon explained in his Essay On Commerce that mistaking money for wealth always leads to disaster.”
USAGOLD note: At the risk of sounding cynical, it would not be difficult to imagine the Federal Reserve – make that the world central banks – proceeding with some version of MMT even while railing against it and saying they would never engage in such a thing. How far from MMT was quantitative easing? Not far, we would venture.
Repost from 3-17-2019