My sessions at the Levy Summer School 2022

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1. They know how it works

   CONFRONTING MONETARY IMPERIALISM IN FRANCOPHONE AFRICA – The history of the CFA Franc.

   https://moneyontheleft.org/2019/03/15/confronting-monetary-imperialism-in-francophone-africa-with-ndongo-samba-sylla/

   It is undeniable that they know how it works. Read the history of the CFA Franc and then try and explain to me that they don’t know how it works.

   My view is the MMT narrative and framing moving forward should be, it wasn’t that they forgot to update their economic textbooks after moving away from both fixed exchange rates and the gold standard. Make it very clear that They are not stupid and it was in fact a deliberate geopolitical, foreign policy decision made by the West and they called it the rule based order. To simply act as if they were still on fixed exchange rates and the gold standard as they expanded their power abroad. Used it as their main geopolitical tool.

   History shows time and time and time and time again that they fully understand how it works. We have used the wrong framing and narratives for years. We need to adjust it to fit in with history.

2. Why when a recession hits they immediately slash interest rates to zero. Start QE to strip interest income out of the economy. When they are terrified of inflation when a recession or crises hits.

   Why do they do those 2 things immediately. If they really believe what they actually say about interest rates and QT.

   If they actually believed their own propaganda when a recession hits or crises hits they would immediately increase rates and start QT. However, they don’t they do the exact opposite of what their textbooks say.

   Why ?

   The propaganda line is to help to increase bank lending. Which is completely absurd and nobody falls for it, as nobody believes it ever would when demand has fallen off a cliff and companies go bust all over the place as unemployment explodes in a recession.

   Why?

   If everyone knows bank lending will not increase as demand rapidly declines and unemployment increases.

   Why do they immediately slash interest rates to zero. Start QE to strip interest income out of the economy during a crises or recession and do the exact opposite of what their textbooks say you do. Why do they set prices lower via the interest rate and attack the interest income channels via QE?

   If they really think that to set prices lower they have to increase rates and they really think QE adds income to the economy ?

   Doesn’t make sense does it.

   Why ?

   So why do they do the exact opposite of their textbooks and propaganda ?

   For me It’s because they really know how it works and in a time of a real crises it shows. The textbooks and propaganda gets immediately gets thrown out the window as panic sets in. I also think there is a geopolitical, foreign policy aspect to it as the $ is the reserve currency. However, I haven’t fully understood what that is yet. Apart from it helps countries with their $ debt burdens and those countries that are tied to the $ exchange rate.

   The Canadian, European and Japanese central banks have proved over decades that by slashing interest rates to zero. Start QE to strip interest income out of the economy does not increase bank lending because reserves increase.

   A case could be made that by loading up the banks with reserves it reduces bank lending because of the reserve and leverage ratios. They have to set up repo and reverse repo facilities to take the reserves off bank balance sheets in order for them to meet those ratio’s. With QT being the opposite of QE actually helps the banks to lend.The

   So by doing QE on such are large scale they are reducing bank lending when they shout to the world that they have slashed interest rates to zero and started QE to increase bank lending. They know fine well when they introduce the repo and reverse fell facilities to allow the banks to get rid of them. As the AD is taking place that increases the reserves substantially.

   So slashing rates to zero, attacking interest income channels via QE and reducing bank lending by loading banks up with $ trillions of reserves are their clear policies in a time of crises. It is the Monetarists 101 playbook.

   They know how it works and for that brief moment in history they show clearly the understand how it works in a time of panic. In A time of self preservation it blows their BS and propaganda news flows wide open.

   Afterwards and the panic and self preservation have melted away in history. Their BS and propaganda news flows start hitting the headlines again. As they focus on their geopolitical, foreign policy agenda and wonder how much military spending they can do to back up their colonial economic models.

   It is undeniable they know how it works. In a time of crises Dorothy and Tu Tu pulls the curtain back on their lies and deceit. Yellen puts on the red ruby slippers and stays on script to complete the charade.

3. Is there a transcript or a permalink for these? I was not able to watch them live but interested in the balance of payments episode. Thanks

4. I too would like a transcript of permalink for your Levy Summer School 2022 sessions please as I was not able to watch live. Thank you. Aila