The 5 stage life cycle of a fiat currency

Gold and paper currencies have been at war for more than three thousand years. When currencies were pegged to gold, they appeared to coexist peacefully. Nevertheless, when the peg ceased internationally, they became each other’s nemesis and thus began the battle for monetary supremacy. A study on the history of money, and its relationship with inflation, is essential to appreciate the role of gold as money.

For paper currency, there is always a boom-bust cycle. It often begins with the healing of a country’s economic woes and promises of prosperity for all. To better illustrate how the boom-bust cycle works, one can draw reference to the recent economic history of United States. In the late nineties, US technology stocks formed a huge bubble mainly because of over leveraging of debt through low interest rates. Start-up technology companies with mediocre or even negative earnings were valued in the millions. After the crash, which coincided with the terrorist attack on New York, interest rates were lowered again to spur economic growth, forming another bubble in housing. When the housing bubble burst, it almost took down the whole world’s banking system with credit facilities drying up, thus triggering the global financial crisis in 2008. With interest rates kept near zero, special measures in the form of money printing were needed to boost the economy and create jobs.

These cycles have been repeating for centuries. According to Nick Barisheff’s $10,000 Gold, it seems that countries that broke peg with gold standard and introduced fiat currencies go through a five-stage cycle.

Stage 1 is fuelled by optimism and euphoria as politicians promise growth stimulus with the least amount of pain and discipline. In the beginning, there will be promise of fiscal responsibility to print only what the country needs and live within the budget means. However, such period is usually short-lived as politicians and central bankers will soon give in to temptation to print more money so as to stimulate growth.

In Stage 2, restrictions would be slowly removed from the currency-creation process. The idea of paying off debt is no longer important as compared to growth. As a result, growth becomes the single most important driver of the fiat system. As currencies gradually lose value, due to declining purchasing power, people have to work longer hours to maintain their standard of living.

Stage 3 is the gambling stage where excessive liquidity makes its way into the stock market and real estate market. Growth will start to slow down and therefore, more money needs to be created to stimulate growth. This means that interest rates must be maintained at artificially low levels. With interest rates kept low at the same time there’s significant money printing, people will have to take risks on the stock market or real estate market just to keep up with inflation. In stage 3, people also start to borrow more because of the wealth effect with the bubbles causing them to feel like they have more money than they do in terms of purchasing power.

Stage 4 is the penultimate stage of the fiat cycle. Sluggish growth in western countries force financial institutes to try make money through other means than financing and brokerage fees. At this stage, corruption prevails, fundamentals are ignored and wealth is concentrated in the hands of a few. At this point, individuals must look out for themselves by not trusting the government or financial advisors. Those who failed to do so would suffer potential loss of wealth in the latter part of Stage 4 and Stage 5.

Stage 5 occurs when there is hyperinflation, which is the worst economic phase of the fiat cycle. In stage 5, the currency becomes worthless. At this stage precious metals are often reoccurring in the monetary system to be used as currency or be used to back up the currency. Keep in mind that hyperinflation has occurred at least 56 times during the last two centuries.

At each cycle, only the “movers and shakers” can influence lawmakers to implement laws that benefit the rich and elites, especially those with the highest concentration of wealth. The middle and low income groups lose out the most and tend to feel that “the rich get richer”. This is due to the rapid erosion of purchasing power caused by the inflation. During each stage of inflation, gold appears to rise in value as currencies continue to lose value. This is because as paper money loses value, the only alternative will be real money, represented by precious metals such as gold and silver. The increased demand means that they will appreciate in value not only against fiat currency, but also against other tangible assets.

There is strong possibility that the global monetary system may collapse in the near future due to a crisis of confidence in the paper money system. Individuals must realise that the current debt-based model for the monetary system is not sustainable and there will come a breaking point when the government debts become uncontrollable. When that happens, you want to keep your assets in the only real money – Gold and Silver!

Erik Prince’s company plans business in China province under human rights scrutiny according to financial disclosure

An American citizen stands to profit as his security company expands operations into a Chinese province described as a modern-day police state by human rights activists, and where the Chinese government is detaining up to a million Muslims in “re-education” camps.

Erik Prince, a former U.S. Navy SEAL officer and brother of U.S. Secretary of Education Betsy DeVos, is the deputy chairman and minority shareholder of Frontier Services Group (FSG), a Hong Kong-listed security, logistics and insurance company he co-founded in 2014. Prior to FSG, Prince founded Blackwater, a private military contractor that was mired in controversy for its actions in the Iraq and Afghanistan wars — specifically when its employees were convicted of killing unarmed civilians.

(MORE: China is using app to collect personal information on its citizens, report says)
FSG plans to spend approximately $15.4 (HK$120.8) million in Pakistan and Xinjiang, China by May 2020, according to a recent financial disclosure. The Trump administration announced sanctions this week against multiple Chinese entities tied to Xinjiang, citing the alleged human rights violations taking place in the region.

Mary Trump’s Book Shows How Donald Trump Gets Away With It

The problem with a fraud as big as this president is that once you start collaborating with him, it’s impossible to get out.

Too Much and Never EnoughMary Trump’s devastating indictment of how the Trump family created, as her subtitle characterizes him, “the world’s most dangerous man,” hits bookstores this week. Its publication coincides with—as she predicted—record-shattering COVID-19 cases, a fragile economy, and a half-formed government plan to open schools this fall at any cost. By now you have doubtless ingested the greatest hits of her family gossip: Donald Trump

  • ogled his own niece in a bathing suit and
  • sought to fill one of his books with hit lists of “ugly” women who had rebuffed him; Donald Trump
  • paid someone to take his SATs;
  • Maryanne Trump Barry, a retired federal appeals court judge, once described her brother as a “clown” with no principles; Donald Trump
  • was a vicious bully even as a child;
  • Freddy Trump—the author’s father—died alone in a hospital while Donald went to a movie.

The details are new, and graphic, yes, but very little about it is surprising: The president is a lifelong liar and cheater, propped up by a father who was as relentless in his need for success as Donald Trump was to earn his approval. Check please.

But not quite. What is new and surprising is also that Mary Trump, who has a Ph.D. in clinical psychology, has given us a granular portrait of Trump’s profound impairment: She says that her uncle has all nine clinical criteria for narcissism, although she insists that this diagnosis is only the tip of the psychological iceberg—he may also suffer from antisocial personality disorder, sociopathy, and/or dependent personality disorder, along with an undiagnosed learning disability that likely interferes with his ability to process information. I leave it to the mental health experts to determine whether some or all of that is accurate. But what Mary Trump surely adds to the growing canon of the “Trump is unwell” book club is not limited to family gossip or mental health diagnostics: At bottom, Too Much and Never Enough may be the first book that stipulates, in its first pages, that the president is irreparably damaged, and then turns a clinician’s lens on the rest of us, the voters, the enablers, the flatterers, the hangers-on, and the worshippers. It is here that Mary Trump’s book makes perhaps the most enduring contribution to the teetering piles of books that have offered too little too late, even while telling us that which we already knew. Because Mary Trump begins from the assumption that other analysis tends to end with: Donald Trump is lethally dangerous, stunningly incoherent, and pathologically incapable of caring about anyone but himself. So, what Mary Trump wants to know is: What the hell is wrong with everyone around him? As she writes in her prologue, “there’s been very little effort to understand not only why he became what he is but how he’s consistently failed up despite his glaring lack of fitness.”

The book is thus actually styled as an indictment not of Donald Trump but of Trump’s enablers. The epigraph is from Victor Hugo’s Les Misérables, and it’s emphatically not about Donald John Trump at all: “If the soul is left in darkness, sins will be committed. The guilty one is not he who commits the sin, but the one who causes the darkness.” Mary Trump

  1. blames Fred Trump for Donald Trump’s pathology, although she doesn’t claim that her uncle is a tragic victim of abuse. She blames
  2. his family that propped him up (also her family, it should be noted), and then in concentric and expanding circles,
  3. the media that failed to scrutinize him,
  4. the banks that pretended he was the financial genius he was not,
  5. the Republican Party, and
  6. the “claque of loyalists” in the White House who continue to lie for him and to him in order to feed his insatiable ego and self-delusion. Even the phrase “too much and never enough” is perhaps deliberately borrowed from the language of addiction, and what Mary Trump describes here is not just her uncle’s addiction to adulation, fame, money, and success, but a nation’s—or some part of a nation’s—unfathomable addiction to him.

The bulk of the book focuses on the tale of Mary and her brother Fritz’s abandonment by the rest of the Trump clan. Her father, Freddy, the scion and namesake, failed to be the storybook heir to her grandfather’s real estate empire, instead collapsing into a tragic black hole of alcoholism, illness, and despair. Donald Trump, Freddy’s younger brother, not only helped push Freddy down but also stepped on his sinking shoulders on his way into the empty, Freddy-shaped space to become his father’s successor. And as Freddy’s parents and three other siblings altered their lives and priorities in order to orbit around Donald, Mary and her brother were eventually written out of the wills, the empire, and the family story, as payback for their father’s perceived weakness and failures. This is all tragic in its own right, but it also makes Mary, who has been let down by the so-called adults in the room almost since her infancy, perfectly positioned to explain and translate what happens to otherwise high-functioning adults—

  1. her aunt Maryanne, a competent federal judge;
  2. the lawyers and accountants tasked with fulfilling Donald’s whims and hiding his failings;
  3. the sycophants and Republicans and evangelical Christians who support his campaign unquestioningly; and
  4. the officials who now populate the Senate, the Cabinet, and the Oval Office.

All of them appear to be reasonably mentally sound. Yet they all cover for Donald, at the expense of real suffering and genuine human loss, just as the Trump clan ignored Freddy’s disintegration and death. Mary Trump’s childhood trauma has become America’s trauma, and she really wants to know how that came to be. Again.

The section of the book that has garnered the most attention is likely Mary’s claim that Trump cannot be evaluated for pathologies because he is “in the West Wing, essentially institutionalized” and that he has in fact “been institutionalized for most of his adult life. So there is no way to know how he would thrive, or even survive, on his own in the real world.” We are not used to seeing entities like the White House described in this way—a “very expensive and well-guarded padded cell”—as a means of protection for the broken man inside rather than as a platform from which a leader can change the world. And her ultimate point is that even a shattered psyche, buffered from the real world, can still do irreparable damage to it. But the most interesting assessments she offers are reserved for those inside the “institutions,” the people who might have saved us and certainly have not, from

  1. the nuclear family, to
  2. the Trump businesses, to
  3. New York’s bankers and powerful elites, to
  4. Bill Barr, Mike Pompeo, and Jared Kushner.

They all knew and know that the emperor has no clothes, even as they devote their last shreds of dignity to effusive praise of his ermine trim and jaunty crown.

Mary Trump seems to answer the question of why they do this in a section late in the book about Donald Trump’s father, Fred Trump. In describing Fred’s growing realizing that his fair-haired boy, Donald, was a fraud, Mary explains that, yes, Fred himself was a master at fattening his wallet with taxpayer funds, committing tax fraud to benefit his children. (Mary admits she was the one who leaked the family tax information to the New York Times in 2018 for its blockbuster story.) But as it became clear that Donald had no real business acumen—as his Atlantic City casinos cratered and his father unlawfully poured secret funds into saving them—Mary realized that Fred also depended on the glittery tabloid success at which Donald excelled. Fred continued to prop up his son’s smoke-and-mirrors empire because, as Mary writes, “Fred had become so invested in the fantasy of Donald’s success that he and Donald were inextricably linked. Facing reality would have required acknowledging his own responsibility, which he would never do. He had gone all in, and although any rational person would have folded, Fred was determined to double down.”

Mary Trump’s words there could just as easily be true for

  1. John Kelly,
  2. Kellyanne Conway,
  3. John Bolton,
  4. Mitch McConnell,
  5. Susan Collins, or
  6. Melania Trump.

And as Mary Trump is quick to observe, the sheer stuck-ness of his enablers means that Trump never, ever learns his lesson. Being cosseted, lied to, defended, and puffed up means that Donald Trump knows that, “no matter what happens, no matter how much damage he leaves in his wake, he will be OK.” He fails up, in other words, because everyone around him, psychologically normal beings all, ends up so enmeshed with his delusions that they must do anything necessary to protect them. Trump’s superpower isn’t great vision or great leadership but rather that he is so tiny. Taking him on for transactional purposes may seem like not that big a deal at first, but the moment you put him in your pocket, you become his slave. It is impossible to escape his orbit without having to admit a spectacular failure in moral and strategic judgment, which almost no one can stomach. Donald Trump’s emptiness is simply a mirror of the emptiness of everyone who propped him up. It’s that reflection that becomes unendurable. This pattern, as Mary writes, “guaranteed a cascade of increasingly consequential failures that would ultimately render all of us collateral damage.” Nobody, not even Mary, who signed on briefly to ghostwrite one of his books, ends up just a little bit beholden to Donald Trump and that includes his rapturous supporters who still queue up, maskless, to look upon his greatness. As she concludes, his sociopathy “reminds me that Donald isn’t really the problem at all.” That makes hers something other than the 15th book about the fathoms-deep pathologies of Donald Trump: It is the first real reckoning with all those who “caused the darkness.”

Mary Trump is, among other things, a brisk and gifted writer, and she is a fact witness to, and also a victim of, a family that elevated a mediocre and vicious man, at the expense of justice, fairness, and truth. Her real beef is not with her uncle Donald, who has always been exactly as we have long known him to be; that’s why a smattering of new details about his business failures and meanness were never really the point of this book. We’ve read that book before. The perspective of this book is made possible exactly because Mary Trump was one of the first children to be written out of the will, cast out of the family, and denied the support and love that should have been hers, as a result of her father’s perceived failures. It is this—because she was ousted rather than being forced to remove herself—that allows her to see clearly why everyone else stuck around. And what she reveals is a devastating indictment of all the alleged adults who stick around Donald Trump, who came together to fail America, to leave vulnerable populations to fend for themselves, and who continue to lie and spin to pacify his ego. They do it because they can’t admit the payoff is never coming, and to save themselves from the embarrassment of having to admit they were catastrophically wrong.

Bitcoin Is Not a New Type of Money (NY Fed)

Bitcoin, and more generally, cryptocurrencies, are often described as a new type of money. In this post, we argue that this is a misconception. Bitcoin may be money, but it is not a new type of money. To see what is truly new about Bitcoin, it is useful to make a distinction between “money,” the asset that is being exchanged, and the “exchange mechanism,” that is, the method or process through which the asset is transferred. Doing so reveals that monies with properties similar to Bitcoin have existed for centuries. However, the ability to make electronic exchanges without a trusted party—a defining characteristic of Bitcoin—is radically new. Bitcoin is not a new class of money, it is a new type of exchange mechanism, and this type of exchange mechanism can support a variety of forms of money as well as other types of assets.

Money vs Exchange Mechanism
The distinction between money and an exchange mechanism is not new to the field of payments. For example, according to a report from the Committee on Payments and Market Infrastructures (CPMI), a body within the Bank for International Settlements (BIS), money refers to the asset that is being transferred, for example currency in your wallet. In contrast, the exchange mechanism is the way in which the asset is transferred, such as physically handing the currency to a merchant in exchange for a coffee.

It is not uncommon for Bitcoin, and cryptocurrencies more generally, to be described as a new type of money. For example, this chapter of the 2018 Annual Economic Report released by the BIS “evaluates whether cryptocurrencies could play any role as money.” Similarly, Tobias Adrian and Tommaso Mancini-Griffoli categorize cryptocurrencies as a type of money in an IMF FinTech note.

With this in mind, it is worth asking what aspect of Bitcoin is truly unique: the type of money it represents or the exchange mechanism it uses? To address this question, we propose two simple classifications, one for monies and another for exchange mechanisms. For each classification, we make use of categories that are deliberately stark. While finer subcategories might improve the classifications in some instances, it is tangential to our main message.

Three Types of Money

We divide monies into three categories:

  1. fiat money,
  2. asset-backed money, and
  3. claim-backed money.

The distinction between asset-backed and claim-backed money is meant to replicate the distinction between secured claims and unsecured claims. These three categories are broadly consistent with the categories of money proposed by Adrian and Mancini‑Griffoli.

Fiat money corresponds to intrinsically worthless objects that have value based on the belief that they will be accepted in exchange for valued goods and services. A typical example is currency. The paper on which a twenty‑dollar bill is printed is worth almost nothing. But a consumer can purchase coffee by handing over that piece of paper because the barista believes that she can in turn use the latter to purchase something of value. Of course, central-bank issued currencies are different from pure fiat money due to its legal tender status. Examples of fiat money without legal tender status include Rai stones or Ithaca HOURs. And Bitcoin is just another example of fiat money.

Asset-backed monies derive their value, at least in part, from the assets backing the money. A prime example is commodity money. Gold coins are intrinsically valuable because it is possible to melt a coin and find someone who would like to use the metal for another purpose.

Finally, claim-backed monies derive their worth, at least in part, from the promise of some institution to exchange the money for something of value. For example, an (uninsured) bank deposit has value based on the promise the bank makes to exchange the deposit for currency. Non-financial firms could issue claim-backed monies as well. For example, a barista may offer a coffee in exchange for a (fully punched) loyalty card. In this instance, the loyalty card is a specialized type of money that can be exchanged for a valued item. In principle, if others believe that the barista will keep her promise to redeem the punch card in the near future, it could be used like money for other goods, as long as a sufficient number of people want the barista’s coffee.

Three Types of Exchange Mechanisms
Exchange mechanisms can also be divided into three categories:

  1. physical transfer,
  2. electronic transfer with a trusted third party, and
  3. electronic transfer without a third party.

While not identical, our categories are broadly consistent with categories of exchange mechanisms described in the CPMI report mentioned earlier.

Physical transfer is intended to capture the transfer of money through a physical means, such as currency or notes. This includes the exchange of goods and services for a physical money. In the case of currency, if a consumer wants to buy a coffee with a twenty-dollar bill, he needs to physically hand it over. Similarly, he could make a payment by sending a check in the mail, which would be transported physically to the recipient, for example, to pay rent to his landlord. (Technically, a check is a payment order, rather than money. That said, endorsed checks can circulate like money.)

Electronic transfers with a trusted third party represent the vast majority of electronic payments today. These transfers involve some trusted entity responsible for making sure transfers are valid. The Fedwire Funds Service® is an example of an electronic transfer system, with the Federal Reserve System acting as a trusted third party on behalf of banks and other financial institutions transferring central bank deposits to each other. (“Fedwire” is a registered service mark of the Federal Reserve Banks.)

This brings us to the final category: electronic transfers without a trusted third party. These are exchange mechanisms where the validation of transactions is decentralized, as is the case for Bitcoin and many cryptocurrencies.

Classifying Bitcoin
To illustrate how monies differ along these two dimensions, we have built a 3-by-3 matrix combining the types of money with the types of exchange mechanisms and, for each combination, we offer an example. The following table summarizes this exercise.

Bitcoin Is Not a New Type of Money

Monies transferred physically include:

  • currency—a fiat money;
  • gold coins—the value of which depend on the gold backing the coin; and
  • checks—which are backed by the promise of a bank to exchange the check for currency.

In the United States, many bank deposits are insured by the Federal Deposit Insurance Corporation (FDIC), so they benefit from greater protection than only the promise of the individual bank.

Monies transferred electronically with a trusted third party include central bank reserves, which in the United States can be transferred using Fedwire; money market mutual fund shares, a very liquid investment backed by assets (often Treasury securities); and (uninsured) commercial bank deposits.

Finally, monies transferred electronically without a third party include Bitcoin, which is not backed by anything; “stablecoins,” which are cryptocurrencies whose value is (in principle) tied to assets; and tokens from initial coin offerings (ICOs), for which issuers offer rights (though not necessarily legally binding) to a product or service in the future. In all these cases, the transfer of monies can be facilitated without a trusted third party. Notably, all of these examples are recent phenomena that have emerged in the post-Bitcoin era.

As is evident in the table above, Bitcoin and other cryptocurrencies are not a new type of money. Other examples of fiat monies have existed for a very long time. The same can be said for stablecoins, which are just the latest incarnation of monies tied to the value of an asset. By contrast, the third row of the table (“electronic without third party”) did not exist before 2009. The real innovation of cryptocurrencies is that they offer a radically new exchange mechanism. This type of exchange mechanism can support the transfer of different kinds of monies; fiat money in the case of bitcoin, money backed by assets in the case of stablecoins, and even future services or products, as in the case of ICO tokens. And this type of transfer mechanism could also support the transfer of other types of assets, like CryptoKitties.

Conclusion
In this post, we have argued that Bitcoin is not a new type of money. Instead, it is more accurate to think of Bitcoin as a new type of exchange mechanism that can support the transfer of monies as well as other things. Why should we care? History provides lessons about what makes a good money as well as what makes a good transfer mechanism. These lessons could help cryptocurrencies evolve in a way that makes them more useful. But to know which lessons are relevant, it is important to be clear about what is new about Bitcoin.

Michael LeeMichael Lee is an economist in the Federal Reserve Bank of New York’s Research and Statistics Group.

Antoine MartinAntoine Martin is a senior vice president in the Bank’s Research and Statistics Group.

Remnant Episode 168: The Ties That Bind Us – shownotes

A lot of talk about weakness of institutions without any talk about money.

 

Here are shownotes for Remnant Episode 168: The Ties That Bind Us, with Yuval Levin:

-Yuval Levin (AEINational Affairs)

A Time To Build

Inside Trump’s stunning tirade against generals

The Dispatch

Is Bitcoin the Future of Money? Peter Schiff vs. Erik Voorhees

On July 2, 2018, Reason and The Soho Forum hosted a debate between Erik Voorhees, the CEO of ShapeShift, and Peter Schiff, CEO and chief global strategist of Euro Pacific Capital. The proposition: “Bitcoin, or a similar form of cryptocurrency, will eventually replace governments’ fiat money as the preferred medium of exchange.”

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It was an Oxford-style debate in which the audience votes on the resolution at the beginning and end of the event, and the side that gains the most ground is victorious. Voorhees won by changing the minds of 15 percent of attendees.

The Soho Forum is held every month at the SubCulture Theater in Manhattan’s East Village. At the next debate, which will be held on August 27, William Easterly, professor of economics at NYU, and Joseph Stiglitz, a Nobel Prize Winner in economics and professor at Columbia, will discuss whether free markets or government action is the best way to eliminate global poverty. You can buy tickets here.

Stephanie Kelton: ‘They’re going to have massive deficits. And it’s fine’

Kelton is to modern monetary theory what Milton Friedman was to American conservatives for a half century — conversational, fierce, relentless. She belongs to a group of academics who emphasise the role of banking and finance in the economy. In 2008, when the Queen asked at the London School of Economics why no economists had seen a global financial crisis coming, Kelton thought, “Wait a minute, you know, not all of us.”

.. Minsky, her academic grandfather, died in 1996, but his work enjoyed a renaissance after the global financial crisis. He had ways to explain why investments naturally get riskier when times are good. And he was unafraid to pick at what economists call, with some trepidation, “the money question”.

.. Kelton and her clan, with considerable support from historians and anthropologists, believe that money started out not as barter, but as debts. People tracked debts on sticks or tablets, and then began to trade the sticks. Empires, too, decided that their subjects owed them the obligation of taxes, and paid their own subjects in credits — the same ones they accepted to pay off the taxes.

The history of money matters, she argues, because if you see money as inherently a credit, one that states have always created at will, you have licence to think about what a state might do with the money it creates now. When a government spends without taxing, it doesn’t have to be committing a sin. It could be filling a void.

I have always wondered why Kelton ties modern monetary theory explicitly to the policy of a federal jobs guarantee — a minimum pay cheque, for anyone who wants one. “It’s all in Minsky,” she says. A job guarantee is an “automatic stabiliser”, she explains. It stabilises growth by pushing money into the economy during a downturn in the most straightforward way: as firms cut staff, people still have a salary to spend.

“Even now, in this environment where you don’t have actual work for many people to do because you want them sheltering in place, you could define their job as ‘stay home and help us flatten the curve’,” she says. “‘We’re going to pay you to help us save lives by staying home.’ So that job guarantee, even if we had it in place today, could absorb people, restore income with no time limit.”

.. She has taken from this work some measure of empathy for what members of Congress have to do. “I don’t think politicians spend a lot of time thinking, ‘Gee, I wonder if I understand money,’” she says. Instead, they reach for clear words that voters understand: the language of personal finance.

Get your fiscal house in order,” she says. “Belt-tightening. Tough choices. Living within your means.” When politicians use these phrases, even if they don’t know it, they are choosing a theory of money: the Robinson and Crusoe story. Governments become just another household, borrowing shells like Robinson, and face what economists call an “intertemporal budget constraint”: money borrowed now must be paid back later.

“I think that the Democratic party is not as comfortable with the idea of utilising the budget to deliver on their goals as the Republicans are,” she says. “Why not kind of play Santa Claus? Right? I mean, the Republicans did.”

.. When she still travelled to give talks, Kelton would try to use the language of money circling around an economy, rather than in and out of a house. “I always say capitalism runs on sales,” she says. “One person’s spending is another person’s income, right? And every dollar that’s taxed away from me is a dollar that I don’t have, I can’t spend and some business here in the US can’t capture.”  Anyone who saves, in this language, is draining money out of circulation. Paying down government debt, she argues, isn’t a virtue. It’s a leak. It’s how money leaves the economy. “It’s a lost sale,” she says. Who could want that?