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A long-held view of mine-based on solid economic theory and much empirical evidence-is that a global monetary and financial system conducive to a stable global order has three attributes: (1) open capital markets, (2) flexible exchange rates between countries or blocs and (3) a predictable and transparent, or rules-based, monetary policy.

"This is Part 3 (and final) of my series responding to an iNET claim that Modern Monetary Theory (MMT) and mainstream macroeconomics were essentially at one in the way they understand the economy but differ on matters of which policy instrument (fiscal or monetary) to assign to counter stabilisation duties. In Part 1, I demonstrated how the core mainstream macroeconomic concepts bear no correspondence with the core MMT concepts, so it was surprising that someone would try to run an argument that the practical differences were really about policy assignment. In Part 2, we saw how the iNET authors created a stylised version of mainstream macroeconomics that ignored the fundamental building blocks (how they reach their conclusions about the real world), which means that they ignore important differences in the way MMT economists and mainstream macroeconomists interpret a given economic state. I will elaborate on that in this final part. Further, by reducing the body of work now known as MMT to be just 'functional finance', the iNET authors also, effectively, abandon any valid comparison between MMT and the mainstream, although they do not acknowledge that sleight of hand. The series so far is: 1. The divide between mainstream macro and MMT is irreconcilable - Part 1 2. The divide between mainstream macro and MMT is irreconcilable - Part 2"

"The current paradigm of independent, inflation targeting central banks thus obscures the messy history of central banks as public institutions. Since their inception, monetary authorities have performed various different roles; while they served as guardians of price stability in Victorian England, they have originally served as developmental and fiscal agents for expansionary states, and have frequently continued to do so in the centuries since. Treating central bank independence as an ahistorical best practice approach is misleading, and we should recall that there have been alternatives to the current framework. As some have heralded the end of the era of central bank independence, while others have underscored the benefits of re-politicizing monetary policy, it is worth bearing this history in mind."

Modern monetary theory was once the preserve of left-wing utopians. But as governments around the world continue to pile on debt, it's gaining currency

"On Sept. 20, the International Monetary Fund  painted a stark portrait of income inequality in China, with officials writing in a blog post that "More than two decades of spectacular economic growth in China have raised incomes dramatically and lifted millions of people out of poverty. But growth hasn't benefited all segments of the population equally. In fact, China has moved from being moderately unequal in 1990 to being one of the world's most unequal countries.""

"This work presents the first compressive and independent analysis of the contributions of one of the most important public officials in American history.  As a graduate student more than a decade ago, I began to investigate the role that Marriner S. Eccles played during the 1930s, as both a special assistant to the secretary of the Treasury and as the chairman of the Federal Reserve Board of Governors. I was intrigued that Eccles, as a Republican businessman from Utah-and yes a Mormon-became the New Deal's most forceful advocate of Keynesian policy.  Since that time I have come to learn far more about his participation in those years, and, indeed, a good deal more about the vexed political and economic milieu in which his career as a public servant unfolded.  Although this work is clearly intended to amplify the contributions that Eccles made in important policy areas, it also seeks to correct some inaccuracies that have frequently been conveyed about the details of his participation. Moreover, his fiscal and monetary interests were so extensive that it would not be too far afield to view what follows as a history of the New Deal with Eccles as the focal point."

Contrary to common beliefs on fiscal fundamentals, the current debt crisis in the global periphery demonstrates that the solvency of sovereign states is determined by their monetary power. Crucially, liquidity has a cyclical character in the periphery of global capitalism and a countercyclical character in the core.

In the few studies and examinations which exist, in using Treasury securities it's been figured these collateral re-pledging and rehypothecation chains average multiples of six to eight; meaning, that a single UST security might be reused for book and customer business six to eight times. Between 85% and 90% of all Treasuries taken on dealer books are re-used in some fashion. No wonder these banks might become skittish, and why Treasury (and similar collateral) prices remain the way they are. The value in UST's isn't as an investment; it's the liquidity premium demanded by a fragile global monetary system. These are balance sheet tools whose worth is derived from what central bankers and bank regulators (same thing) are in no rush to comprehend.