Market Watch has the article ‘Good luck! We’ll all need it’: U.S. market approaches end of ‘superbubble,’ says Jeremy Grantham.

“We are in what I think of as the vampire phase of the bull market, where you throw everything you have at it,” Grantham wrote. “You stab it with COVID, you shoot it with the end of QE and the promise of higher rates, and you poison it with unexpected inflation – which has always killed P/E ratios before, but quite uniquely, not this time yet – and still the creature flies.”

That is “until, just as you’re beginning to think the thing is completely immortal, it finally, and perhaps a little anticlimactically, keels over and dies,” said Grantham. “The sooner the better for everyone.”

I have been waiting for this since 2009. Which just proves that you cannot time the market. I disagree that the inflation was unexpected. I knew the MMT community was unwise to focus on the fact that there wasn’t the inflation that people expected. I urged them to explain why there wasn’t inflation, and what could change that would bring the inflation on. There were plenty of explanations to be had through the economic lens of MMT. MMT proponents were silly to ignore the obvious.

Dr. Vinay Prasad has published this important post – We need to talk about the vaccines. Beside the discussion by Dr. Vinay Prasad about specific items of controversy, he makes a point about censorship that is also very important.

Perhaps the most serious objection to censorship is that the censors themselves are not fit for the task. Censors are unaccountable. They may be biased, misinformed or undereducated. They may lack perspective. In short, they are as fallible as the people they are trying censor. This is especially true in science, where, as history shows us, consensus views can turn out to be false, while controversial or heretical ideas can be vindicated.

Finally, in the modern world, where the censor is so often a giant technology company, there is tremendous potential for abuse. The same tools used to suppress scientific “misinformation” may someday be used to solidify political power and stifle dissent.

Legitimizing censorship may be the most hazardous outcome of this pandemic.

Naked Capitalism has the article Rorschach Test: Revealing Western Press Reactions to Xi Jinping Speech at Davos.

Here is a quote from the transcript of Xi Jinping’s remarks.

Thanks to considerable economic growth, the Chinese people are living much better lives. Nonetheless, we are soberly aware that to meet people’s aspiration for an even better life, we still have much hard work to do in the long run. China has made it clear that we strive for more visible and substantive progress in the well-rounded development of individuals and the common prosperity of the entire population. We are working hard on all fronts to deliver this goal. The common prosperity we desire is not egalitarianism. To use an analogy, we will first make the pie bigger, and then divide it properly through reasonable institutional arrangements. As a rising tide lifts all boats, everyone will get a fair share from development, and development gains will benefit all our people in a more substantial and equitable way.

Can you imagine remarks like this from Joe Biden, let alone from Joe Manchin or Krysten Sinema?

The Zero Hour with RJ Eskow has the interview David Sirota: Meltdown and Don’t Look Up

How many people are ready to face the facts? I think I get a lot of negative feedback because I am trying to make people face facts that they would rather not acknowledge.

RT has the article Kremlin reveals how it will respond to NATO deployments to Ukraine.

Russia believes it would be “madness” to start a war over Ukraine, but doesn’t rule out taking “counter-actions” to NATO deployments if security negotiations fail and its concerns are left unaddressed, the Kremlin has told CNN.

Previous USA news reports have been putting forward the USA “Intelligence” propaganda that Russia will mount an invasion in January of 2022. Let’s see whose reporting on this will turn out to be more accurate. I wouldn’t bet on the USA “Intelligence” Agency’s propaganda.

The Grayzone has the transcript and the video of US war lobby fuels conflict in Russia, Ukraine, and Syria: ex-Pentagon advisor.

Col. Doug Macgregor, an ex-Pentagon advisor, on how the US war lobby fuels conflict from Ukraine to Syria. Washington, DC, he says, is “occupied territory. It’s occupied by corporations, by lobbies.”

This is not exactly the interview I expected, but it is very believable in my estimation.

Naked Capitalism has the post A Movement to Organize Against the Systemic Corruption of Congress.

Well, there you have it folks. A proposal for a movement to turn around the systemic corruption of the United State Congress – systemic corruption of the kind our founders feared might eventually destroy democracy. Left unaddressed, it probably will.

I wonder if this has any more chance for success than the People’s Party Movement.

Naked Capitalism has published a transcript of the interview Economist Michael Hudson explains inflation crisis and Fed’s secretive $4.5 trillion bank bailout. I started reading the transcript, and finished by watching the video.

Economist Michael Hudson discusses what is causing the global inflation crisis, and also how the US Federal Reserve quietly bailed out big banks in September 2019 with $4.5 trillion of emergency repo loans that appear to have blatantly violated the law.

You couldn’t ask for a more complete coverage of all things economic and diplomatic.

Stephanie Kelton has published this amazing, mis-titled article The Clock Runs Down on Mainstream Keynesianism.

I argued that deficits put downward pressure on interest rates. Krugman says I got that wrong. The standard line — Krugman’s line — is that deficits normally lead to rising interest rates. I argued that deficits actually put downward pressure on the interest rate and that policymakers have to fight against this natural gravitation by doing something to prevent the overnight rate from dropping toward zero. This is really just basic supply and demand.
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The government is coordinating its deficit spending with bond sales, thereby doing a reserve drain (selling bonds) along with a reserve add (deficit spending), so that the newly injected reserves are quickly transformed into newly added Treasuries. The bond sales are done to coordinate the impact so that the government’s fiscal operations don’t leave the banking system with a larger monetary base (and lower interest rates).

But this is fighting against the gravitational effects on the interest rate. Deficit spending pushes down on the overnight rate, and bond sales pull it back up. When bond sales are perfectly coordinated with deficit spending, the opposing forces cancel out, leaving the monetary base looking stable as Krugman’s graph shows.

To finish the thought experiment, consider what would happen if Congress decided to dispense with Treasury auctions and simply allow budget deficits to supply the system with base money instead of Treasuries. Clearly, that would drive the overnight rate to zero. If it wanted to, the Fed could still achieve a positive overnight rate, simply by paying “interest on reserve,” or IOR, balances. That, too, would be fighting against the natural tendency for rates to go to zero.

I find this amazing because I have been trying to explain this for years, but proponents of Modern Monetary Theory, including Stephanie Kelton, have been discouraging me from saying this. In her lectures she sometimes explains that Treasury bonds are just another form of money. I keep saying that bonds are not just another form of money in that you cannot go to the grocery store to buy a loaf of bread and pay for it with Treasury Bonds. You would first have to sell your bond to someone who would give you the money that the grocery store would accept.

Kelton mentions paying interest on reserves to counter the effects of the “Congress decided to dispense with Treasury auctions and simply allow budget deficits to supply the system with base money instead of Treasuries.” The implication here is that the selling of Treasury bonds counteracts the effect of “budget deficits to supply the system with base money”.

Before Stephanie Kelton married, she was Stephanie Bell, publishing this article in September 2000, “Do Taxes and Bonds Finance Government Spending?” So, she ws explaining all this to the academic world long before she was discouraging me from saying this.

I want to have this post at the ready for the next time someone tries to discourage me from explaining this. The trouble with both of these Kelton/Bell articles is that you have to pay to see them in their entirety.

Oh, by the way, here is the reason that I say that this article is miss titled. One of the biggest lessons I learned about Keynesianism is that, in a depression, you cannot stimulate private sector spending by putting more money into the private sector. The Government actually has to buy things that put people to work. This lesson is hidden inside what Stephanie Kelton has written in this miss titled article. If the government puts money into the private sector by buying stuff, and then takes the money back out by selling bonds, the impact of that money as a stimulus is pretty much negated.

The Guardian has the opinion piece The next US civil war is already here – we just refuse to see it.

The United States needs to recover its revolutionary spirit, and I don’t mean that as some kind of inspirational quote. I mean that, if it is to survive, the United States will have to recover its revolutionary spirit. The crises the United States now faces in its basic governmental functions are so profound that they require starting over.

This article is a perfect example of the fact that coming up with solutions is far harder than identifying the problem.