The yen, podcast, and book announcement – all on International Workers’ Day

It’s Wednesday and today I consider the current yen situation which is causing some hysteria in the financial media even though there is not much to worry about. I also provide access to my latest podcast with the Washington-based Bad Faith, which traverses issues of class, the demise of the Left, Modern Monetary Theory (MMT) and degrowth. And the book announcement – pre-orders are now available. And finally an anthem for International Workers’ Day.

It’s International Workers’ Day today

Today, on May 1, we celebrate – International Workers’ Day – which is a “celebration of labourers and the working classes” and keeps the hope alive that solidarity can prevail and together we can turn the ship around.

So raise our glasses!

Which leads into to the next item …

Japan about to collapse! Not!

There is a recurring trend in social media.

Twitter heroes who hate Modern Monetary Theory (MMT) try to find data movements that they think invalidates our work.

The focus recently has been on Japan given its currency has depreciated somewhat.

I have seen words such as ‘collapse’ – ‘death spiral’ and more used to describe the exchange rate movement.

All signs of hysteria really.

Just last week the yen was apparently heading into oblivion and of course MMT was thus shown to be completely wrong.

Two things.

First, the characterisation of MMT that usually appears in these savaging Tweets, Comments and Posts is so far off the mark that one wonders the grasp on reality that the instigator might have.

We read, for example, ‘see yen is depreciating, MMT is void because it said deficits don’t matter’ or words to that affect.

There is nothing in the core of MMT that says that a currency cannot depreciate under certain conditions.

And when the Bank of Japan maintains a zero policy rate and most of the rest of the world’s central banks, unnecessarily hike rates then of course, currency speculation will shift funds to where they might earn the higher rate of return.

No MMT economist would say anything different.

Second, usually the timing is also rather interesting.

For example, the day after some Twitter hero who works for a right-wing think tank in the US had concluded that the yen was collapsing, what happens?

A sudden appreciation on Monday.

The Twitter heroes went silent with that – a very inconvenient fact for them.

Then a weakening after the US Bureau of Labor Statistics releases its latest – Employment Cost Index Summary – for March 2024, which reveals that:

Compensation costs for civilian workers increased 1.2 percent, seasonally adjusted, for the 3-month period ending in March 2024 … Wages and salaries increased 1.1 percent and benefit costs increased 1.1 percent from December 2023.

That is probably a rate fast enough to scare the crazies in the US Federal Reserve Bank and perhaps even motivate a further rate hike.

The result, expected movements in interest rates are not downwards.

None of these gyrations have anything to do with fiscal deficits or government debt.

All the financial commentators are doing gymnastics trying to work out whether the Bank of Japan has been engaging in official foreign exchange market interventions – by selling US dollars from its reserves and buying yen to put a floor under the currency.

It looks like the Minister of Finance may have instructed the Bank to draw down some USD from the so-called ‘Foreign Exchange Fund Special Account’ held within the Ministry and buy some yen from the commercial banks.

The Bank of Japan may also have been engaging in transactions to support the yen via its relations with the ECB and the Federal Reserve.

The commentators do not know one way or another and the lack of transparency is to head off profit-seeking speculators.

Sometimes the Finance Ministry comes clean soon after the intervention (for example, in September 2022) but other times they do not (for example in October 2022).

When the Ministry releases the end of month data on foreign exchange interventions we will know and we will know exactly which day if any the interventions occurred when the Ministry releases the quarterly data.

In the meantime, I am sure no-one in the Ministry is too perturbed.

The inflation rate is falling fast – even with these imported price pressures via the exchange rate.

And exports are booming, which puts a floor in the currency anyway.

We do have some idea of the Bank’s behaviour though.

Just yesterday (April 30, 2024), the Bank of Japan released the latest Money Market Data that is suggestive of an intervention.

I will write more about that later when I have time and have fully digested the data.

Latest Podcast – Bad Faith with Briahna Gray

The other day I did an interview with Briahna Gray for her Bad Faith podcast.

The topic was centred around the work I have done on the demise of the Left and the role that class plays, all from an Modern Monetary Theory (MMT) perspective.

It was a really interesting interview and challenging at times, which makes a change from many interviews I do with the media.

It was scheduled to go for an hour. But when we were just exchanging post interview pleasantries, the conversation continued and Briahna asked me if we could include that ‘off the record’ material to which I agreed.

I got the sense we could have talked for much longer than we did, which means it was interesting.

Advance orders for my new book are now available

I am in the final stages of completing my new book, which is co-authored by Warren Mosler.

The book will be titled: Modern Monetary Theory: Bill and Warren’s Excellent Adventure.

The description of the contents is:

In this book, William Mitchell and Warren Mosler, original proponents of what’s come to be known as Modern Monetary Theory (MMT), discuss their perspectives about how MMT has evolved over the last 30 years,

In a delightful, entertaining, and informative way, Bill and Warren reminisce about how, from vastly different backgrounds, they came together to develop MMT. They consider the history and personalities of the MMT community, including anecdotal discussions of various academics who took up MMT and who have gone off in their own directions that depart from MMT’s core logic.

A very much needed book that provides the reader with a fundamental understanding of the original logic behind ‘The MMT Money Story’ including the role of coercive taxation, the source of unemployment, the source of the price level, and the imperative of the Job Guarantee as the essence of a progressive society – the essence of Bill and Warren’s excellent adventure.

The introduction is written by British academic Phil Armstrong.

You can find more information about the book from the publishers page – HERE.

It will be published on July 15, 2024 but you can pre-order a copy to make sure you are part of the first print run by E-mailing:

The special pre-order price will be a cheap €14.00 (VAT included).

And remember the lines from the film:

Ted: Bill, I think they want us to say something.

Bill: What should I say?

Ted: [shrugs] Make something up.

Bill: Be excellent to each other.

And so we are.

As to any parallels with the film, we still haven’t worked out who the stupid waiter is!

Note also, that for the rest of this month (May) I am dropping back to a Monday and Thursday pattern for blog posts to give me extra time to finalise the manuscript.

Regular transmission will resume in June.

Smith Family Manga – Season 2 coming up

Season 2 of the Smith Family Manga, which was scheduled to begin on May 24, 2024 will now resume on June 21, 2024.

Scripting is well advanced and the drawings are progressing but we need a few more weeks to get the material completed.

Some video material will be forthcoming about the series in early June.

Music – An Anthem

Given that it is May 1, I thought some rad anthems might get the blood running and help us maintain the rage.

Here is the fabulous British band – The Clash – and this is their ode to Marxist resistance – The Magnificent Seven – taken from their fourth and best album that was released in 1980! – Sandinista.

“The title refers to the Sandinistas in Nicaragua, and its catalogue number, ‘FSLN1′, refers to the abbreviation of the party’s Spanish name, Frente Sandinista de Liberación Nacional.”

The album demonstrated how punk could evolve away from the early thrash type genre.

A classic bass line and some classic lines:

Ring! Ring! It’s 7:00 A.M.!
Move y’self to go again
Cold water in the face
Brings you back to this awful place
Knuckle merchants and you bankers, too


So get back to work an’ sweat some more
The sun will sink an’ we’ll get out the door
It’s no good for man to work in cages
Hits the town, he drinks his wages
You’re frettin’, you’re sweatin’
But did you notice you ain’t gettin’?
Don’t you ever stop long enough to start?
To take your car outta that gear
Don’t you ever stop long enough to start?
To get your car outta that gear
Karlo Marx and Fredrich Engels
Came to the checkout at the 7-11
Marx was skint – but he had sense
Engels lent him the necessary pence

That is enough for today!

(c) Copyright 2024 William Mitchell. All Rights Reserved.

This Post Has 7 Comments

  1. Excellent song choice Bill. Remember that, the Sandinista revolution, as an example of hope of a people against their corrupt rulers backed by Washington bullets, and likewise dig my album out from time to time for the hope and great tunes. Never completely certain of the song title reference – 8 characters are referred to in the song including Richard Nixon and a dog. The Magnificent Seven is of course a well-known movie in which the seven heroes stand up for the villagers against the bandits (as Somoza and the US armed Contras). May I also recommend Chumbawamba’s Sandinista song, An Interlude: Beginning to Take It Back from their album, Pictures of Starving Children Sell Records.

  2. Excellent interview.

    The ALP’s and TAI ‘s chief economists (“progresssives”….) nominated the inflation issue as their chief objection to MMT, in discussions I had with them. (And the Treasurer said the “public won’t accept taxes to control inflation”).

    Now, putting aside their probable lack of understanding of the role of the JG as a price anchor, I think I would have had more success if MMT had presented straight up a JG, ZIRP, zero tax, zero borrowing regime, with price controls and rationing in cases of supply chain failures.

    Craig Emerson objected the “USSR didn’t turn out too well”, but of course where the Soviets repressed free markets, his profession is repressing the financial sovereignty of nations; and he is forgetting the fabled free market ‘efficiency’ sometimes fails, witness the current housing and cost of living crises in Oz. Yet policitians have to get elected, plans to increase taxes are a non-starter in the electorate.

    Others like prof Mark Blyth say nations must be able to produce the necessities, to institute currency-sovereignty (or export something other nations want) – you covered that point in exposing the failures of current IMF and World Bank ideology; and Yanis Varoufakis says only the US can have monetary sovereignty, (being the global reserve currency) so I conclude MMTers have failed to successfully explain the case for IMF reform including currency-exchange.

    Then there’s the Marxist economist Michael Roberts who rejects MMT because “it just promotes capitalism”.

    And that’s just the view from all these ‘Left’ economists…


  3. @Neil Halliday re: ‘the “public won’t accept taxes to control inflation”. But apparently they will be more receptive to higher borrowing costs, supposedly instituted for the same reason. The saver (non MMT educated) part of the population and the banks certainly are, that’s for sure.

  4. More on taxes to control inflation (from a tweet re the “Finding the Money” film):

    ” What does all this mean in plain English: gov can always find the money, it needs to tax and issue securities for macroeconomic management (price stability, interest rate stability, financial stability) END.”

    Bur what about zero interest, zero tax, price controls and rationing when necessary.

    Maren Poitras herself told me she’s sorry for not pressing the point that currency-issuing governments don’t need to issue securities (sell bonds) nor do they need to tax (except to sanction unhealthy consumption).

    The elephant in the room is fabled free-market ‘efficiency’.

    “Markets are good servants, but bad masters, and a worse religion.” Amory Lovins.

    I wasted much time with Labor colleagues who reject exercising currency sovereinty because of the ‘taxation as inflation control’ idea.

  5. More free market as a religion, on twitter:
    Rudolph Troha:
    “It’s Marxism, ushered in under the gaslighting scare of climate change. It must be resisted at all costs.”

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