Thursday, March 16, 2017

Keeping Score

Modern Money Theory
No scorekeeper ever call a Sports Contest by running out of numbers. No Sovereign Nation with a Sovereign Currency can run out of Currency. 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 Labor skills, shortage of Productive capacity and/or lack of input materials that causes difficulty in production of needed Goods & Service causes inflation.

Any Government can authorize creation of just as much money as needed to accomplish the task that it has the capacity to accomplish without dislocating the stability of its economy.

William Hodge