I had a great conversation with Dylan and Vinnie on the Think Liberty podcast. We talked about MMT, cryptocurrency, anarchism, government, and DUNE. You are literally insane if you don’t listen to this great convo!
Dylan Lawrence Moore of the Volitional Science Network and Nima Mahdjour of EconomicsJunkie.com discuss the “Bitcoin Bubble” and why bitcoin, or any cryptocurrency, has any value.
What is the value of bitcoin and cryptocurrency? What gives it that value?
Is bitcoin an actual currency? Viewed from the lens of Modern Monetary Theory.
End of March I pointed out that economic numbers indicated a disastrous drop in net private saving, foreshadowing a recession unless things change quickly.
It looks like things have changed quickly this past quarter (Q1 2018), plus there seem to have been revisions to Q4 numbers. The federal budget deficit has expanded sharply to -$1.1 trillion which should take us out of the danger zone for now:
The current account deficit has expanded a bit to -$569 billion:
This means that net private saving (Fed data not yet available) will come in at around $531 billion, a level that hasn’t been seen since 2013.
Red alert is off, numbers are looking good again, for now.
More specifically, there hasn’t been a period of negative net private saving that hasn’t resulted in a depression or at least a very severe recession, such as the so called Great Recession of 2008.
Recent Q4 data paints a shockingly bleak picture:
The government’s deficit (red line) has gone from a Q3 level to around -$900 billion to a surplus of around $15 billion in Q4. As you can see, the private sector’s net saving (blue line) has correspondingly crashed from a positive $538 billion to -$499 billion (!!), with the foreign sector’s saving (green line) also expanding a little bit.
The way to reverse this trend would be massive government budget deficits or a monumental reversal in the US current account deficit. If this doesn’t happen in the current and future quarters, a huge recession is now all of a sudden in the cards, even though private sector leverage has remained low, when compared to 2008 levels, for now.