qnt

You can buy or sell 1 share of apple for a bid/ask spread of 1 cent today, or 0.006% of the stock price, and pay no commission to do so. There are very few other examples out there where pure competition between market participants have made things so cheap as to be indiscernible from free.

Parasites indeed

They get some hate here but are lovely birds. Waking up in the bush to their song is quite special.

I know someone on a farm who had a few as pets. One somehow was taught to roll on its back and lift a fork/spoon like a barbell

You need to take a break man. Change something. Fair call if you don’t like travel. Just go live anywhere else for a month. Pick a city and pretend it’s home. Rent your place out. If you like it make it 2 months. If it’s shit you’re just back to square 1, no big deal.

All the best

mate honestly that sounds like you're cutting off your legs to save your toes.

you should take a backpacking holiday in a busy city somewhere (overseas?). If you have fun, try a working-holiday in a new city for a couple weeks. Maybe one you've been thinking of moving to?

just try it on. There's no downside.

That's exactly the point - money is just numbers on screens. there is no money to loan out. the act of lending creates the money.

- Bank starts with $0 capitalisation or deposits - Customer goes to bank and asks for $1 loan - Bank believes customer is creditworthy and says yep - Bank creates two accounts for customer, loan account and deposit account. Loan account is -$1 and deposit account is $1 - customer transfers $1 from their deposit account to someone else's account at a different bank in exchange for goods/services - customer account at the bank is now loan account -$1 and deposit account $0 - Customer eventually needs a way to get $1 back from somewhere else to pay the loan back, else face bankruptcy proceedings etc etc

Commercial banks all agree with each other that they accept each other's demand deposit accounts as a form of money.

Not at all.

When you get a loan, the bank creates a liability and deposit out of thin air. The deposit is a "demand deposit", which is effectively equivalent and fungible to central-bank-backed currency (hence the term "money" usually applies to both, though they are different things).

The bank needs no existing customer deposits to create a demand deposit and liability in your account.

You should run through your example again, except begin by creating a loan, rather than first beginning by a customer lending the bank a deposit.

The BoE article linked above is absolutely correct.

- Socks should end perfectly mid-calf

- Sunglass arms go over helmet straps, not under

- No half wheeling

Wholeheartedly agree. The best system is no system at all - problem is it doesn't really satisfy any requirements. Anything added beyond that is extra room where fragility creeps in & the tradeoff shouldn't ever be taken lightly.

MMT has nothing to do with any kind reserve currency status. The primary mistake most people make with MMT (and one which is continually enforced by both sides of the political media), is that they think it is a policy choice, or a "kind of thing a government does".

If nothing else, please takeaway that MMT is a _framework for economic analysis_. You can apply it to any economy, you can use it to look at any policy decision, and you can work with this tool if you're a conservative or progressive. I find a lot of value in using it to understand China, Japan, emerging markets, economic history, etc.

With relation to the original topic, the answer through an MMT lens is very simple. Nominally, there's no limit.

A cornerstone idea of MMT is that a currency issuer can always purchase anything for sale in the currency that it has a monopoly over. Examples of these monetary sovereigns include the US, the UK, Japan, Australia, China. It does not include the EU, or most emerging markets (who effectively use another government's currency).

The implication of this is that a monetary sovereign government has no binding constraints on the amount of debt it can issue (it can of course issue debt to itself if no-one else is around to buy it, i.e. Treasury -> Central Bank).

Now that's not to say that government borrowing has no real limits. The most useful constraints to look at are real resource constraints (possible supply of goods and services), and external constraints (do you need to pay something in a currency you can't control?). If the government is purchasing more goods or services than the resource constraints are available to supply, you'll see an appreciation of prices (inflation).

Simply creating more dollars doesn't lead to inflation. Fiat currencies are just units of account (think score points), not some kind of commodity. Japan's money supply has quintupled since 1990 to 2020 (from memory), while the consumer price index has been roughly flat, and the USD/JPY exchange rate has been roughly rangebound (wide range, but not a monotonic increase like one would expect if using intuition )

Rushed for time, but happy to discuss/debate points of contention.

I think "the economic system is wrong" is a bit of a stretch, but despite objectively working pretty well there are a few glaring problems (some of which potentially lead to society imploding if left unchecked... but aside from that, pretty good!)

As far as I'm aware, I think the most glaring problems (tragedy of the commons, dealing with negative externalities) are very well known & have relatively well understood policy solutions (e.g. Pigovian tax).

When there is wide enough social buy-in that these policy solutions can be implemented without expending/risking too much political capital, the "problem" ends up resolved.

A good example might be smoking in Australia. Very highly taxed, forced grotesque health warning images plastered all over the cigarette packets, etc. The comparison travelling through Italy vs Australia with respect to number of smokers is pretty amazing. The population understands & accepts the negative externalities of smoking well enough to accept the forced hand of policymakers intervening in their lives, and won't vote anybody out because of it.

So to me, the more appropriate question is, how do we incentivise enough social buy-in that people will accept the personal disadvantages of e.g. a carbon tax, and still lend their support (vote) to the party who choses to implement it? Didn't work well for France last time they tried to hike taxes on fuel.