Guys... would really love to discuss this and get your thoughts. I want to be clear that this is not political.
Why is it not political? Because it's pretty obvious that both political parties seem to ascribe to this. I really like some presidents over another, but even the president "I" personally really like 100% totally supported MMT. Our last three (four) presidents right now have gone full-fledged MMT. I haven't been active enough to see if this gets heated, but the Bye Bye post seems to show that it does. I'd suspect it's political.
So if I may, would really like to discuss this because I have some significant concerns and am interested in identifying if these are founded or not.
First, what is Modern Monetary Theory?
My understanding of MMT is that the Government simply prints more money, effectively borrowing from itself to cover expenses, thereby increasing inflation, which in turn reduces the value of the debt.
Am I correct in understanding this?
Here are my long-term concerns:
- It damages strength of the US Dollar
- China is looking to replace the US Dollar as the global currency
- It inadvertently hurts those who do not own assets. E.g., it directly affects people who don't own homes, do not own stocks, etc.
My big concern is that, along with China's intention to replace the USD as the global currency, or at least get the world off of it (even if not the Chinese Yuan), it will lead to a collapse of the USD and in turn, the complete collapse of our economy.
WHEN that happens... what does that mean for us?
My mind can really go down a crazy path. I imagine inflation first skyrocketing, and then massive deflation to the point where our dollar isn't worth anything. At that point, what happens to those of us that own homes? Can / will the banks repossess them?
Do I expect this to happen in the next 4 years? No... do I expect it to happen in the next 8 years? Maybe. Do I expect it to happen in the next 20 years? Absolutely I do.
My mortgage payoff date is in exactly 20 years. The stock market is really, really high. I can take a residential loan out of my 401k and pay off my home's mortgage immediately. I now owe myself back money with interest. I effectively have taken a loan from myself, at a stock market high.
Two things I'd like to see in this thread, if I may...
1 - Is MMT good, and what do you think? Am I totally blowing this out of proportion?
2 - Is it dumb for me to take a tax-free 401k residential loan to pay off my house, there-by securing my high-value stock price before any potential stock market crash, knowing I'll be paying MYSELF back with interest at twice the original interest rate?
Why is it not political? Because it's pretty obvious that both political parties seem to ascribe to this. I really like some presidents over another, but even the president "I" personally really like 100% totally supported MMT. Our last three (four) presidents right now have gone full-fledged MMT. I haven't been active enough to see if this gets heated, but the Bye Bye post seems to show that it does. I'd suspect it's political.
So if I may, would really like to discuss this because I have some significant concerns and am interested in identifying if these are founded or not.
First, what is Modern Monetary Theory?
My understanding of MMT is that the Government simply prints more money, effectively borrowing from itself to cover expenses, thereby increasing inflation, which in turn reduces the value of the debt.
Am I correct in understanding this?
Here are my long-term concerns:
- It damages strength of the US Dollar
- China is looking to replace the US Dollar as the global currency
- It inadvertently hurts those who do not own assets. E.g., it directly affects people who don't own homes, do not own stocks, etc.
My big concern is that, along with China's intention to replace the USD as the global currency, or at least get the world off of it (even if not the Chinese Yuan), it will lead to a collapse of the USD and in turn, the complete collapse of our economy.
WHEN that happens... what does that mean for us?
My mind can really go down a crazy path. I imagine inflation first skyrocketing, and then massive deflation to the point where our dollar isn't worth anything. At that point, what happens to those of us that own homes? Can / will the banks repossess them?
Do I expect this to happen in the next 4 years? No... do I expect it to happen in the next 8 years? Maybe. Do I expect it to happen in the next 20 years? Absolutely I do.
My mortgage payoff date is in exactly 20 years. The stock market is really, really high. I can take a residential loan out of my 401k and pay off my home's mortgage immediately. I now owe myself back money with interest. I effectively have taken a loan from myself, at a stock market high.
Two things I'd like to see in this thread, if I may...
1 - Is MMT good, and what do you think? Am I totally blowing this out of proportion?
2 - Is it dumb for me to take a tax-free 401k residential loan to pay off my house, there-by securing my high-value stock price before any potential stock market crash, knowing I'll be paying MYSELF back with interest at twice the original interest rate?