Modern Monetary Hypnosis

As many listeners have long suspected, your podcast host did, as a child, run away and join the circus.  Not dissimilar from a traditional childhood, it was your classic Gypsy camp.  If children misbehaved, we would be "lock[ed]... into stocks, or throw[n]... into a cage and hoist[ed]... into the flytower... dangling precariously over the stage." Our ringmaster, Giuseppe Grimaldi "was horribly morbid, living in perpetual fear of death, and especially of being buried alive.  When he finally died... his will directed that his eldest daughter cut his head from his corpse just to be certain." Sure, perhaps quirky, but certainly not the oddest troupe - not Pandemonium Carnival.

So, looking to make a career of it your podcaster tried his hand at clownship. But, by that time, famous clowns like Pagliacci, Pennywise and Pogo were, despite slaying their audience with their routines, giving a bad name to the profession. So then, this host turned to tarot card reading and hypnosis. Despite earning some minor acclaim in London as Madame Simza, your host simply didn't have the chops and was forced to turn to the only option left: a Masters in Business Administration.

Surprisingly, it was an easy fit. Tarot cards - which "illuminate your past, clarify [the] present, show... the future" - had taught me everything I needed to know about finance. The card "Temperance, [when] inverted [is] indicative of volatility." If one draws "The Fool, someone has been led astray" - an investment fraud. "The Two of Cups?" It represents "a powerful bond" - a sovereign bond. Your podcaster learned about hypnosis too, except that the economics professors used different terms for it: expectations policy, forward guidance, moral suasion.

----------WHY----------
Part 01: Central banks cannot define, identify, measure or map modern money. And they haven't been able to since the 1970s. So instead they offer "moral suasion". That's a fancy word for threats, posturing and coercion. That's all fine and well until the global economy requires money.

Part 02: How does one define an asset bubble? Might there be fundamental, non-speculative reasons why prices are persistently high? Also, why did money-financed fiscal expansion fail in Japan? What does that experience tell us about the present?

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----------WHAT----------
Suasion, Sure, But Is It Really Moral?: https://bit.ly/3bXMsBQ
If the Fed’s Not In Consumer Prices, Then How About Producer Prices?: https://bit.ly/2NomiOd
(Reinhart & Sbrancia) The Liquidation of Government Debt: https://bit.ly/363NUih
(Van Metre & Ashton) Everything You Wanted to Know About Inflation: https://bit.ly/2LZ8OZ5
The Fundamentals of the Bond ‘Bubble’: https://bit.ly/3qI1D6c
When They Introduced An Even Longer Gov’t Bond: https://bit.ly/3qCYhBw
They Keep Assuring Us Japan Can't Happen Here: https://bit.ly/39UfwHP
What is a Concentration Camp?: https://bit.ly/3iCN6G2
Alhambra Investments Blog: https://bit.ly/2VIC2wW
RealClear Markets Essays: https://bit.ly/38tL5a7

----------WHO----------
Jeff Snider, Head of Global Investment Research for Alhambra Investments with Emil Kalinowski, troubled by definitions. Artwork by David Parkins. Podcast intro/outro is "Whispering of the Stars" by Luella Gren at Epidemic Sound.