Goldilocks And The Magic Money Tree
Comment of the Day

January 23 2023

Commentary by Eoin Treacy

Goldilocks And The Magic Money Tree

Thanks to a subscriber for this article by Anatole Kaletsky which may be of interest. Here is a section from the conclusion: 

To call the vindication of MMT a reductio ad absurdum, as I did above, is perhaps an exaggeration. MMT economists made some interesting arguments about the interaction of monetary and fiscal policy which orthodox economists and central bankers were wrong to ignore. But what about the Magic Money Tree? If inflation is cured painlessly by the end of the year and Goldilocks returns to dominate the markets for the next decade, as investors are now expecting, then governments will revive their interest in the Magic Money Tree. I too may start to believe in fairy tales—and we can all live happily ever after.

Eoin Treacy's view

The immortal word’s of former Citigroup CEO Chuck Prince come to mine when I see bond yields rising from already high levels, and a risk-on rally gaining traction on Wall Street. ““When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing,” 

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