Printing More Money Could Lead To Financial Calamity

To dream the impossible dream

To fight the unbeatable foe

To bear with unbearable sorrow

To run where the brave dare not go

– “The Impossible Dream (The Quest),” Man of La Mancha

BALTIMORE, MARYLAND – We left off yesterday promising to rev up the chainsaw.

We’re searching the woods, hills, and urban jungles for the coveted “magic money tree.” Family: arbor. Genus: pecunia. Species: magicae.

For thousands of years, alchemists, grifters, and proto-central-bankers have tried to find it. But it has remained as elusive as the Himalayan snow lizard and the American jackalope.

But it must be out there somewhere. Everyone believes it, including the president of the USA. “Give me some of that money,” says he.

And yesterday, the magic money tree – aka MMT… aka Modern Monetary Theory – was in full flower. CNBC:

Stocks rose on Monday as the market’s rally to record highs resumed amid increasing expectations that China and the U.S. will reach a so-called phase one trade deal.

The S&P 500 and Nasdaq Composite hit all-time closing highs as they rose 0.8% to 3,133.64 and 1.3% to 8,632.49, respectively. Both indexes also notched intraday records. The Dow Jones Industrial Average also had a record close, gaining 190.85 points, or 0.5% to 28,066.47.

President Donald Trump tweeted about the record, saying: “Enjoy!”

MMT Myth

The idea – given to us by David Graeber, Elizabeth Warren, Thomas Piketty, and a whole cast of MMT enthusiasts and half-wit hallucinators – is that money really does grow on trees. It is just a matter of political willpower, they say… even courage… to put it to use.

Donald Trump, for example, displayed that kind of courage when he pushed for a tax cut in December 2017. The Fiscal Times estimated that the cut could add $24.5 trillion to the U.S. debt over the next 20 years.

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