Daily Economic Update: April 30, 2024

 Yields fell 3-5bps as investors await the FOMC and other action this week.  Stocks started off the week strong with Tesla gaining approval for self driving/driving assistance in China. Oil fell on cease fire hopes and the Yen stabilized around 156 v. USD after a wild weekend where it had touched 160.

The Treasury Quarterly Refunding Announcement showed their estimates for the April - June borrowings at $41billion more than forecast back in January, while also projecting $847 billion in new borrowings in July to September quarter.  We'll get more details on the mix of Treasury issuance this Wednesday ahead of the FOMC.

On the day ahead it's Employment Cost Index data, S&P housing prices and Amazon earnings.

XTOD: Stagflation, you say? NY Fed's estimate of underlying inflation is basically flat at 2.6 percent 

XTOD: "Every person who is angry about inflation should go to their local planning board and demand more high-density housing in their neighborhood. That’s what we must have to be a vibrant economy. Housing is crucial."  -  @Claudia_Sahm

XTOD: "Apollo Accused in Lawsuit of Illegal Human Life Wagering Scheme"   Creditors to APO portcos have been subject to this for decades

XTOD: 🚨Holy Moly🚨 We're on course to spend $𝟎.𝟗 𝐭𝐨 $𝟏.𝟒 𝐭𝐫𝐢𝐥𝐥𝐢𝐨𝐧 on debt cancellation. That's more than we spent ALL higher education spending before 2020, and as much as we are on course to appropriate for TOTAL education over the next decade.  https://crfb.org/blogs/total-cost-student-debt-cancellation

XTOD: Look at each item on your to-do list and ask, "Is this truly necessary?”

Daily Economic Update: April 29, 2024

FOMC Wednesday with Jobs Day in ‘merica Friday will make for another busy week.  Last week was rocky for equities, but ended up being a strong week as tech came to the rescue.  Friday's PCE data showed sticky inflation with slowing savings and continued strong spending and income.  I should probably include an obligatory mention of the weak Yen and something about speculation of Chinese Yuan devaluation, so there, this sentence counts.

Trump apparently wants to reduce the Fed’s independence per a WSJ report (link to Reuters report on the WSJ report...more accessible).  Irrespective of the underlying rationale for this apparent proposal, at the end of the day I categorize this apparent news item as part of the larger meta issue which is broadly the giant experiment titled ‘Do deficits matter?’ One way to lower deficits might be to pay less interest, which is definitely an MMT view. 

I could be wrong, but I think the "deficit" issue is probably the biggest macro issue at present and the one from which narratives about other macro variables, especially inflation likely stem.  As an aside, author, Mark Higgins provided his thoughts on what he sees as "Three Financial Challenges for the United States in 2024"  which he subtitled: Inflation, War, and Unsustainable Spending, so I must not be too wrong.

Recent chatter about deficits reminded me of Ole Miss economist Josh Hendrickson's recent appearance on the Macro Musings podcast, in which Hendrickson discussed his work on the Treasury Standard and Global Dollar Dominance.  Some excerpts I found worthwhile to consider are as follows:

Hendrickson: So, if we think about seigniorage, in order to try to generate seigniorage— essentially, to do this effectively, to use this as a tool for emergency finance, you're not going to be just maximizing the seigniorage every single period. What you actually want to do is you want to create the biggest tax base possible. And so, when it comes to seigniorage, that means having the highest level of money demand possible. The way that you can do that is by committing to price stability during normal times. But then, when you go to war, or you have some national emergency or something like that, you need to spend a lot of money really quickly, then you can exploit that monopoly.

Hendrickson: And you exploit that monopoly while you have a large tax base. But, again, you've got to go back to that commitment to price stability afterwards, because otherwise, if people know that every time there's an emergency you're going to do this, then anytime that people anticipate there's an emergency, they're going to react. Then also, you're just going to reduce your tax base over time, because you're just going to have this record of always printing money, or always debasing the currency, or something like that, during times of war, and those effects are permanent. What you want to do is actually promise to reverse any of those effects that were experienced during the war once the war is over.

.......

The cost of the US Treasury security being the global reserve asset is that, as the world economy grows, what happens to the demand for reserve assets? Well, it grows along with that growth in the world economy, and so, if the United States doesn't provide that, if they don't provide a sufficient amount of Treasuries, then yields are going to go down.

Hendrickson: That tends to incentivize governments to borrow more. "Look, we're running these massive deficits, and it's not affecting our interest rates. Maybe we should run bigger deficits." The thing is, there are lessons from the literature on the international monetary system that essentially say that when you control the supply of this global reserve asset, and this asset is a debt instrument, well, you run into a problem, because the more and more debt that you run up— at a certain point, people are going to become concerned that you won't be able to pay back that debt without resorting to devaluation. But the thing is, is that the devaluation doesn't actually have to come first, right? All that has to happen is that people start to worry about devaluation, and they start acting on it. 

Hendrickson: They start selling their dollar-denominated assets, and then you have turmoil in international markets, and maybe the Federal Reserve has to intervene and buy some of these assets or settle down the Treasury market, which leads to expanding their balance sheet and leads to higher prices. And so, the point is that the system has substantial benefits. As long as the level of debt that the US has is sufficiently low, the benefits dramatically exceed the costs, at least for policymakers. We can debate some of the other secondary effects on the actual people of the United States, [but] for policymakers, as long as the debt level is low enough, they can sustain this indefinitely.

Hendrickson: The problem becomes, if debt gets sufficiently high, now the system becomes potentially, very fragile, and it becomes subject to self-fulfilling runs, and once it gets there, then we're talking [about] very costly consequences. And so, what I'm encouraging people to think about is that, yes, this foreign policy tool that we have might help us to impose sanctions. It might help us to do things— to harm people without actually having to engage in military conflict, but there are costs people might diversify away. Yes, having the global reserve asset might give the United States policymakers the ability to do all of the things that they want to do, but it's also potentially fragile, if debt levels get too high. So, there are always costs and benefits, and policymakers need to think about those things.

............ 

 I'm not going to say it's not sustainable. What I'm going to say is that it's not sustainable under certain circumstances, and we don't want to ever find ourselves in that certain circumstance.

Hendrickson: Policymakers need to be cognizant of that, and they need to be especially cognizant of that when they're thinking about deficits and when they're thinking about debt, because there is a point at which you can have too much debt, and then it becomes unsustainable. You don't want to find yourself in that position, but also, in terms of the secondary effects, it's not at all clear that this is beneficial to the United States as a whole.

If you're looking for a more in depth study of the history of the Treasury market, I would say George Hall might be the go-to.   His paper with Tom Sargent titled: Three World Wars: Fiscal-Monetary Consequences is worth a read (at least read the first paragraph and concluding remarks).   https://macromusings.libsyn.com/george-hall-on-the-history-of-the-us-national-debt-and-government-financing

On the week ahead FOMC and Jobs will dominate the data, while earnings will continue to be in focus:

Mon: No Major Data, I'd take a day off to get ready for Powell on Wednesday

Tue: ECI, home prices

Wed: ADP, Quarterly Refunding Composition, ISM Mfg., JOLTS, FOMC

Thu: Jobless Claims, Productivity & Unit Labor Cost, Factory Orders

Fri: Job's Day!  ISM Services, Fedspeak returns

XTOD: btw guys the Fed actually has 3 mandates, the one never spoken of is to have "moderate long-term interest rates"  just mentioning - in case any president thought rates were too high.

https://federalreserve.gov/aboutthefed/section2a.htm

XTOD: An interesting week ahead for the global #economy and #markets, including (but not limited to)…

  The release of the US monthly #jobs report, Eurozone inflation and GDP, and China’s #PMI’s; and 

  A 2-day policy meeting at the #FederalReserve.

By the end of the week, we should have some additional information on two of the three key questions for the US economy (and related spillovers for the global economy):

  How the #Fed is thinking about recent data, including the worse-than-expected #growth and #inflation numbers: and

  The extent to which the labor market can continue to support strong consumption at a time of greater weakness in the balance sheets of the more vulnerable segments of society.

XTOD: Had drinks last night with a friend who is retired CIO of a big Institutional CRE shop who's been investing in CRE for 40+ years and really made his first fortune on RTC. 

A few thoughts I thought worth passing along....He's seeing lots of new deals being underwritten on FORWARD INTEREST RATES which he sees as dangerous as the yield curve is downward-sloped.  "We always assumed refi rates would be around where they were at origination, NOT LOWER."   Not enough margin of safety in underwriting....I asked about Jon Gray of Blackstone's pronouncement that it's the right time to get back in to CRE: "He's talking his book.  He has lots of nervous investors both among public pensions and increasingly HNW.  Depends on sector, but generally we haven't hit bottom yet."

XTOD: Being smart  and being wise  are not correlated.

Daily Economic Update: April 26, 2024

Yesterday's 1Q2024 GDP report was "stagflationary" with lower than expected real growth (1.6% vs. 2.5% estimated) and higher than expected inflation (3.1% v. 3.0% estimated on headline, with Core PCE at 3.7% v. 3.4% estimated).   Of course everyone is pointing to the miss being driven by trade and inventories as making it somewhat less meaningful, but who knows.

Stocks fell over 1%, then rebounded some. Out on the curve hit highs not seen in 5 months with the 10Y over 4.70%.   Initial jobless claims broke the streak of printing 212K by printing 207K. 

After hours Google and Microsoft earnings helped improve sentiment.

On the day ahead we have the BoJ who is facing a super-weak Yen and the U.S. PCE report along with the UofM sentiment survey (asking consumers how they feel about gas prices...not really, but highly correlated).

XTOD: Microsoft’s yearly data center spend for the next few years is more than that of the Apollo program (yes, adjusted for inflation)

XTOD: Treasury Secretary Janet Yellen said the US economy 'continues to perform very, very well' and that she still sees inflation falling back to more normal levels

XTOD: GDP growth came in a bit below expectations at a 1.6% annual rate in the first quarter. 

But much of the slowdown was in non-inertial items like inventories (-0.35pp) and net exports (-0.86pp). The better signal of final sales to private domestic purchasers was 3.1%.

XTOD: If no revisions, and there will be some surely, today’s quarterly Core PCE implies a m/m up by almost 50 bp (48 bp to be precise) to be reported tomorrow - this is really bad (consensus and whisper are around 30 bp) and most likely warrant a language shift by JPOW on Wednesday 

Market shifted full price cut from Nov to Dec and residual probability of a 2nd hike is now down to just a third

XTOD: Sitting at Eden Rock conceiving of the most outrageous outcomes

It's hard to conceive of a US slowdown presently

We're no way near through the end of fiscal spend

I keep saying 2 for 2...

We won't see 2% inflation for 2 years

The fiscal transformed the US into the economic locomotive of the world

Great, but...

Arguably, the dollar standard was conceived under the conceit that the US economy would be a dullard

Today, instead, it's the locomotive of the world...

And it's reset the risk free rate to intolerable levels for the RoW

Somethings gonna break

But before then

Just like the late 1920s, 

There's a huge carry trade pouring money into US risk assets

Borrow in yen for zero, catch 5.5% on cash

Hell, 20% on risk asset price gains pa

Pay your yen back in stronger dollars

This money train is unstoppable

Then imagine the ECB cuts rates

They really need to...

And that carry trade is gonna be amplified to the moon.

The RoW needs lower rates

Will the Fed subjugate its domestic growth mandate

Will it be convinced of the need to coordinate an interest rate cut with the Europeans ?

A coup de whisky...

It's done so many times before

But it'll need convincing

Somethings likely to break

Can I remind you that the yen has devalued 40% 

40% !!

And US banks have huge unrealized losses on their hold-to-maturity treasury holdings and no one cares, no one asks for quantification, everything's gonna be alright, yeah ?

And we're 10 bps away from ten year treasury yields exploding higher

And 5 bps from the red cabbage accelerating its decline

Recap

US economic engine of the world

Global monetary system never conceived of this

Higher rates killing the collateral value of Treasuries

Not killing the velocity of US GDP growth

Something gonna break

Fed will cut in unison with the Europeans

Risk asset prices could explode higher

if you don't understand, go back to the beginning 

Daily Economic Update: April 25, 2024

Sorry, I was busy day-trading NYC restaurant reservations, I hope those gains are going to be subject to Biden's proposed 44.6% capital gains tax rate.  A mostly boring day for equities with META beating after hours but trading much lower anyway.  Yields rose a few bps as stocks fell slightly ahead of today's GDP release, the first of two 'major' economic releases for the week.  Yesterday's strong durable goods data did little for stocks but seemed to support higher yields with the 5Y Note Auction being relatively poorly received.  

As expected both the Tik Tok and non-compete bans are being challenged.

On the day ahead it's GDP, jobless claims, home sales and the infamous 7Y Note Auction.  

XTOD:  Huh. The Macro Musebot (https://ai.macromusings.org) had some strong views about its favorite macro theory:  "What is your favorite macroeconomic theory? Is it (1) New Keynesian, (2) Monetarist, (3) Fiscal Theory of the Price Level, or (4) MMT?  @JohnHCochrane

My favorite macroeconomic theory is the Fiscal Theory of the Price Level (FTPL). While the New Keynesian, Monetarist, and MMT frameworks all offer valuable insights, the FTPL provides the most coherent and compelling explanation for the determination of the price level in my view. 

The key strength of the FTPL, as articulated by John Cochrane, is that it directly addresses the fundamental question of why money has value. The FTPL argues that money is valuable because the government accepts it for tax payments - the "state theory of money." This is a more satisfying explanation than the ad hoc assumptions underlying the quantity theory of money or the vagueness of MMT. Additionally, as Jesus Fernandez-Villaverde and Eric Leeper have discussed, the FTPL highlights the inherent linkages between fiscal and monetary policy. The government's intertemporal budget constraint means that the central bank cannot fully control inflation without considering the actions of the fiscal authority. This nuanced view of policy coordination is more realistic than the strict separation of monetary and fiscal policy in New Keynesian models.

That said, I don't dismiss the other theories entirely. As Scott Sumner and Robert Hetzel have noted, monetarism and New Keynesianism have been useful frameworks at different points in history, depending on the prevailing economic conditions. And Nathan Tankus has rightly pointed out that MMT has pushed the profession to think more carefully about the consolidated government balance sheet. Ultimately, I believe the FTPL provides the most coherent and comprehensive theory of the price level, one that incorporates the insights of other approaches while addressing their shortcomings. By focusing on the government's intertemporal budget constraint, the FTPL offers a powerful lens through which to understand historical episodes of inflation and deflation, as well as guide policymakers in the present day.

XTOD: "We think any company that has an economist, you know, certainly, has one employee too many."    - Warren Buffett

XTOD: "In 2025, we get either Bidenomics 2.0 or Trump 2.0: in either case we are going to see more huge fiscal deficits, protectionism, and industrial policy, but in the latter case, perhaps on steroids." -  Rabobank

XTOD: "We now get more news in a single day than most people ever saw in their lifetimes a few short centuries ago. Our brains aren’t hardwired to have this much information thrown at them. And so much of the information we see is negative."

Daily Economic Update: April 24, 2024

A solid day for stocks with the S&P up 1% in regular trading as earnings season is proving solid. There was Elon optimism after the bell, as he promises more affordable vehicles and the every elusive robotaxi. On the data side, the flash PMI's showed some slowing, especially in manufacturing, while sales of new homes beat estimates.  In other news the Senate passed the Ukraine funding bill that includes Tik Tok ban. We also had FTC passing a vote on a final rule banning non-competes:

"Under the FTC’s new rule, existing noncompetes for the vast majority of workers will no longer be enforceable after the rule’s effective date. Existing noncompetes for senior executives - who represent less than 0.75% of workers - can remain in force under the FTC’s final rule, but employers are banned from entering into or attempting to enforce any new noncompetes, even if they involve senior executives. Employers will be required to provide notice to workers other than senior executives who are bound by an existing noncompete that they will not be enforcing any noncompetes against them."

It will be interesting to see how this plays out and (a) whether it survives legal challenges and (b) whether it will lead to the amount of new businesses and increased pay that the FTC anticipates.

Aside from that you've got students looking for refunds from Columbia.

Today's data features Durable Goods and we'll get the 5Y Treasury note auction.  The 2Y was little changed and is 4.94% and the 10Y at 4.61%

XTOD: 🚨 Excited to announce we have launched the Macro Musebot! 🚨 Powered by insights from 400+ episodes of the Macro Musings podcast, this AI is your personal guide to the world of macroeconomics, monetary policy, and all our past guests! (1/n) https://ai.macromusings.org

XTOD: I dislike Taleb in a lot of ways, but his greatest contribution to knowledge is this Medium post, a chapter from SKIN IN THE GAME, about the intransigent minority. 

Explains Columbia, explains trans rights, explains every social issue we've been dealing with.  https://medium.com/incerto/the-most-intolerant-wins-the-dictatorship-of-the-small-minority-3f1f83ce4e15

XTOD: tbh sleeping in a tent on a city street seems like a pretty good life skill to practice for a humanities grad in 2024

XTOD: “This odd combination — higher stock valuations despite higher rates — has not happened in any period of Fed tightening going back to the late 1950s.”

XTOD: This is a HUGE policy change, if it’s right.  President Biden previously called for extending the tax cuts below $400k — which could cost $1.5 to $3.5 trillion.  Letting them expire would cost $0!!

XTOD: The best way to regulate anger is not to vent right away. It’s to calm down first. 

154 studies: Deep breathing, meditation & yoga are better antidotes to aggression than yelling, punching & running.  Anger management is about lowering your heart rate, not raising it. Relaxing reduces rage.  http://scientificamerican.com/article/feeling-angry-chilling-out-helps-more-than-blowing-off-steam

Daily Economic Update: April 23, 2024

A ho-hum news day. Stocks finally rose with tech names like Nvidia rebounding and yields rising.  No Fedspeak and perhaps some optimism that Middle East tensions won’t spark a larger regional conflict provided a somewhat supportive backdrop for markets.  

Yields await the major data of the week in the form of GDP and PCE.  Ahead of today's 2Y auction we have the 2Y at 4.97% and the 10Y at 4.61%.

On the day ahead it's S&P PMI's, New Home Sales and the 2Y Treasury Auction.

XTOD: The 10-year yield was 3.78% in late December. As this story notes, it hit 4.70% last week, almost a 100 basis point rise in four months.  The story asks if the 10-year yield can hit 5% as if this were a bold call. It's not.  Saying the 10-year will NOT hit 5%, or the yield rise has no more than 29 basis points left, is a bold call!  ---  This says a lot about sentiment.  It suggests that predicting the bond sell-off has no more than 29 bps left is still the safe call.  However, it is "tricky" to predict yields may rise another 30 basis points.  Bullishness still prevails.   Only when yields rise enough that everyone dusts off Jamie Dimon's 8% prediction from two weeks ago and proclaims him Nostradamus is it over.  

I think it happens when yields get above 5%. Then it is safe to be bearish.   So, almost there but have some work left.  https://wsj.com/economy/central-banking/path-for-10-year-u-s-treasury-yield-to-5-is-possible-but-tricky-e29be0c9?mod=latest_headlines

XTOD: america’s problems solved in one tiktok https://twitter.com/i/status/1782536475244150808

XTOD: is that Stephanie Kelton

XTOD (evidence that the tik-tok and Kelton are in action?) Today, my Administration is investing $7 billion in a new program called Solar for All that will enable over 900,000 low-income households to have solar on their rooftops for the first time.  Solar for All will give folks more breathing room – and cleaner breathing room at that.

XTOD: “A DCF is like the Hubble telescope - turn it a fraction of an inch and you're in a different galaxy.”  - Curtis Jensen

XTOD: Most insufferable man I matched with on Hinge was a middle-aged CRE guy.  Asked him to let me know the make and model of his car so I could have a guest parking pass preemptively printed for him. (We were meeting at my place and walking to a spot in midtown for drinks.) 

He says, "you'll know it when you see it." 

Already annoying as that doesn't help at all. My concierge cannot print a pass with this information.

Guy proceeds to show up in a base model Porsche with vanity tags.  

I cancelled the date.

XTOD: What commission-based profession has the best reputation?

Daily Economic Update: April 22, 2024

Stocks on a 6-day losing streaks, markets repricing the timing of Fed rate cuts (now looking like November), Bitcoin "halving" completed (this reduces the compensation miners receive for solving a challenging mathematical puzzle that allows them to propose a new block - which should slow the supply of Bitcoin and in theory increase the price), geopolitical tensions and tensions on college campuses, U.S. election chatter heating up, would seem to sum up the last week or so.

With Powell's seemingly "hawkish pivot" all of a sudden all the people who were in love with the Fed's forward guidance, dot plot, parading out every Fed President on TV, etc.,  all seem to be saying it's use case has run it's course.  Hmm...sounds familiar, see my commentary on the January 31, 2024 FOMC meeting here.   In it I shared my advice to the Fed:

my advice to Powell is to revisit Robert Greene’s book The 48 Laws of Power with specific consideration to the following of Greene’s laws:

              Law 4: Always Say Less Than Necessary: When you speak, always say as little as possible. The more you speak, the more likely you are to say something foolish.

              Law 5: So Much Depends on Reputation – Guard It With your Life: Reputation is the cornerstone of power. You can influence more people and gain more opportunities with a solid reputation. Therefore, it is essential to protect it fiercely.

              Law 9: Win through your Actions, Never through Argument:  Winning an argument gives you momentary advantage but winning through actions gives you lasting power. Actions demonstrate competence and create value, whereas words, often in arguments, lead to negative emotions and resentment.

               Law 20: Do Not Commit to Anyone: It is the fool who always rushes to take sides. Do not commit to any side or cause but yourself.  By maintaining your independence, you become the master of others.

Good news is there is NO Fedspeak this week as the Fed is on blackout.

On the week ahead GDP and PCE along with Income and Spending.  It's all tech earnings.

Mon: no major releases

Tue: S&P PMI's, new home sales

Wed: durable goods

Thur: GDP,  jobless claims

Fri: PCE

XTOD: Blackthorne: You think this is over?! You think the unprecedented escalation between Israel & Iran will end here—both sides content with flashy but ultimately inconsequential strikes? You're a fool! The rules have changed  Mariko: The Anjin is upset about the falling price of oil

XTOD: Every manager has the same 5 problems:  

- They can't get clear direction

- They need better people

- They lack the budget

- They don't have time

- They won't say "No" 

Fix those first. Everything else is a distraction.

XTOD: If you want to get rich quickly, the biggest factor is luck.   If you want to get rich eventually, the biggest factor is consistency.

XTOD: Complexity is overrated. Simplicity is underrated.  Analytical ability is overrated. Personal behavior is underrated.  Having a high income level is overrated. Inculcating a disciplined saving habit is underrated.

XTOD: A hired man, who is not a shepherd and whose sheep are not his own, sees a wolf coming and leaves the sheep and runs away, and the wolf catches and scatters them. This is because he works for pay and has no concern for the sheep.

Daily Economic Update: April 19, 2024

The equity losing streak continues.  Jobless claims continue to print the same number and Philly Fed data was solid, allowing yields to rise further, with the 10Y at 4.63% and the 2Y settling in at 5%.

Other than that people are still watching Netflix and I guess we'll be releasing gas from the strategic petroleum reserve this summer.

In other news Ray Dalio reminds us what he thinks good money is while also "not" recommending people by gold:

"Good money is both a good medium of exchange and a good storehold of wealth that is widely accepted around the world. The most globally recognized and accepted monies are the dollar......These monies are held in debt assets—i.e., they are debt-backed money—i.e., currency = debt. "

" Since debts are promises to pay money, when a government has too much debt to be paid, its central bank is likely to print money."

" Gold, on the other hand, is a non-debt-backed form of money.....Cryptocurrencies are also non-debt monies. I don’t know of any other types of non-debt monies...."    

"When the financial system is working well—which is when there aren’t debt and inflation crises and the borrower-debtor governments printing debt-backed monies are meeting their obligations and paying their interest without printing and devaluing money—debt assets and other financial assets are good assets to hold; on the other hand, when the reverse is the case, gold is a good asset to own. That’s the main reason that gold is a good diversifier and why I have some in my portfolio. "

On the day ahead it's just the dovish Goolsbee from the Chicago Fed.

XTOD: So market went from pricing 7 cuts for FY24 in mid January to pricing just ONE in Nov with dwindling odds of a second cut. Not sure if everyone realizes : that’s a very short timeframe for such a radical reversal. We had anticipated this (that’s what #bigflip2 was about). 

Yet it shows that the initial 7 were built on flimsy expectations, actually mostly driven by a policy error by JPOW in Dec 23.  

It should keep everyone on their toes when it comes to this new found certainty of higher for longer, probably driven by yet another policy error….  This game is not easy…

XTOD: Once RRP vol hits zero, liquidity will continue to drain from the financial system with continued Balance Sheet Runoff and Treasury issuance. The trend-line is pretty powerful. As it stands, there could be as much as $1.3T drained from the financial system by the end of the year

XTOD: It's a really interesting view that highlights how the military revolution of 14th-16th century redefined the state, its financing needs, and how trial & error led to central banking. As Josh notes, it is no accident that the state today maintains a monopoly on violence and a monopoly on money. Here is his article (2/5) https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4759755

XTOD: MMT was taken for a test drive. They called it the “CARES Act.” The failed theory crashed into a wall & burned to the ground as MMT-ers doubled down with more “free” money igniting the mother of demand-pull inflationary spirals.  Other than that, the play ended swimmingly.

XTOD: “We are all born original, but many die as photocopies."  —Blessed Carlo Acutis, c/o 

@stephengadubato