Thursday, March 16, 2017

Keeping Score

Modern Money Theory
No scorekeeper has ever called off a Sports Contest because of running out of numbers. Likewise, no Sovereign Nation with a Sovereign Currency can run out of money.

A score keeper can create all the numbers need to score the game The Federal Reserve Banks have the ability to create unlimited Money. They could finance all Public Debt at zero % interest. Only Congress prevents it by preventing the Fed from direct financing of Original Debt. That is only permitted to a select Group of Representatives from Corporate Banks. The Fed is only permitted to operate in the Open Market.

Unlimited available Money is not the cause of inflation. Limited needed Labor skills, shortage of Productive capacity and/or lack of input materials cause difficulty in production of needed Goods & Service. Shortage of Goods & Service causes inflation.

The Government can authorize creation of just as much money as is needed to accomplish any task. If labor, productive capacity and raw materials are available, the money can be created to accomplish the task without dislocating the stability of its economy.

William Hodge