Yan Liang: MTM eta BRICS

Hasiera berria. A New beginning

Gogoratzekoa:

In Joseluis Txillardegi

2006tik aurrera, Warren Mosler-ek esaten duen moduan, ahalegindu naiz “to fight the good fight”, alegia, MTM ikasteari, Euskal Herri osoan hamaika hitzaldi emateari, arkikulu mordoak idazteari (zentsura absolutua jasan arte), eta UEUko blog honetan aparteko lan eskerga plazaratzeari.

Aspaldi honetan, MTMrekin batera GAZA dut aztergai…

Orain, nire espazioa Mundu zabala da hala ekonomian (MTMren bidez) nola geopolitikan (GAZA, Israel, AEB, NATO, BRICS, …).

Alta, Euskal Herria beti dago, eta egongo da, nire baitan. Orain beste maila batean, beste modu batean, beste eginkizun batzuetan: ikus We Basques do need a real Basque independent State in the Western Pyrenees, in Javier Sádaba: “Con la edad soy más radical, no más moderado”. Izan ere, zenbat eta zaharrago izan orduan eta erradikalago bilakatu naiz.

Goazen, orduan, MTM (Moneta-Teoria, Modernoa), ingelesez MMT (Modern Monetary Theory), eta BRICS lotzen dituzten bi lan oso interesgarriz jabetzeko.

China’s BIGGEST Debt Problem Is Local. MMT Explains Why. | Prof. Yan Liang

(https://www.youtube.com/watch?v=rM174ufXeNg)

[Part 1 of 2] With one of the strongest and most sovereign currencies in the world, does China really have anything to worry about when it comes to monetary or fiscal policy? Well, yes, local government debt turns out to be quite a structural problem. One, however, with a relatively simple fix, at least absent domestic power politics.

Today I’m talking to Dr. Yan Liang, who is a Professor of Economics at Willamette University, a private liberal arts college in the US. She is also a Research Associate at the Levy Economics Institute and a Non-Resident Senior Fellow at the Global Development Policy Center of Boston University.

Yan specializes in Modern Monetary Theory (MMT), the Political Economy of China, Economic Development, and International Economics.

Transkripzioa:

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then that is precisely the problem right so when you have the central government that is only taking on about 21% of the

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GDP worth of debt and the local government is taking you know over 50%

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and then plus the hidden debt then that is anywhere you know everybody’s a guess right but at least you know 90% of GDP

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is debt at the local government level and so that is really problematic because the central government has like

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you just said right the monetary sovereignty they’re able to issue the currency they’re able to you know uh

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fiscally spent the local governments can’t right and it’s not until 2014 that they’re allowed to issue bonds actually

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previously they they are not even allowed to issue bonds right so that really leave them in the limbo so if you

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ask me what to do I think you know the solution is very simple you have to Reign right your fiscal revenues and

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your spending responsibilities that’s as simple as it gets if you want the Lo local government to continue to spend if

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you believe the spending should take place in the local level then you need to give them more taxing power you need to give them more tax

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[Music]

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revenues hello everybody this is Pascal from neutrality studies and today I’ve got Yan langang with me who’s a

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professor of Economics at willamet University a private liberal arts college in the US she’s also a research

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associate at the Levi economics Institute and a non-resident senior fellow at the global development policy

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Center of Boston University Yang specializes in modern monetary theory

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that is mmt in short and the political economy of China Economic Development

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and international economics so today we want to discuss this link between mmt

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and the Chinese approach to monetary policy as well as the impact of this economic approach to development of um

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of global South countries Yan thank you so much for coming online today well

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thank you for having me it’s fantastic that you agreed to this because you’re actually a student of

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Randall Ray who I had on this channel before and the the topic of mmt or the

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approach the way that mmt conceptualizes the economy and the impact of monetary

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politics to me is quite an important one because it’s different

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from Orthodox kind of uh uh uh economics although Randall Ray pointed out your

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your PhD your your previous your former PhD adviser that um you know all of the

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things that mmt says were already kind of common knowledge within the Keynesian School uh of Economics so it’s not

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really new it’s just that it’s not being applied can you maybe tell us first why you work in this on this field so much

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as opposed to let’s call it the neoc classic Model of well supply and demand

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driven analysis yeah so my academic Journey actually really start with the study of

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Minsky um so I was in China doing my undergraduate we had a Cornell professor

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who’s a PO bride who visited my University um and so he taught something about Minsky in terms of the history of

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capitalism um in terms of you know Financial instability hypotheses and and all of that and so that got me really

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interested in just ternative approach um and then I pursue my PhD at UMKC working under Randall Ray um so my actually

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thesis was on China’s development and looking at development Finance from the mmts perspective and study how you know

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for example foreign investment um whe it helps or not U with economic development

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and so um that is sort of the journey and you’re right I think this approach is very much embedded in the web of what

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we call heatherock economics right so there is the post kingian economics which is really the direct follower of

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joint Rea Kings right so Kings talked about you know the modern money has existed for 5,000 years right that

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started with the public institutions uh you know pronounce a un account and Al

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impose obligations um which can be fulfilled right by this unit of account

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so this is nothing really new in terms of what exactly money is uh but I think what mmt does very well is um you know

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another strand of the economic thought that is Incorporated in mmt is a so-called institutionalism and that is

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the original institutionalism with b and dablin um you know people and uh sort of

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that really focus on the the role of Institutions so what we’re talking about money but not in a vacuum right we talk

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about money in very specific historical context and very specific institutions

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um and so I think that is really what give mmt the strength that does not start with a very ahistorical concept of

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money is born from you know heing haggling right all the anthropologists a lot of the historians would tell you

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that’s not where money came from um so I think that is very important that this approach it really takes a lot of

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different uh disciplinary insights um and also really embedded in that sort of

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herdox tradition and so I think that is what gives mmt the strength and again I think mmt can be applied so broadly

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right we could look at it from a Public Finance perspective right what can we do with public money um but it could also

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uh really apply to a monetary system design uh perspective right which is money is such an important the powerful

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institution that moves things so we need to be part of the monetary design right

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we meaning the people right so I think that is why really fascinates me um as a way to kind of you know learn about mmt

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and apply it um in economics yeah some people some people look at mmt as a form

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of of ideology of you can as they can spend how much ever it wants and it

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doesn’t need to to think about about money at all it just prints it and that’s it um that’s not what mmt is is

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it no not at all I think if anything is the opposite so the mmers would say we

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are actually not talking about theories we’re talking about a description we’re describing how modern money actually

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works right the history of historical evolution of money right start with mamia when you have the temple that it’s

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using money as a way to appropriate resources and to record debt and the payments of debt um and it’s also a

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description of how the modern monetary system works right so when treasury spends how it cuts the check and how it

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gets through the Central Bank uh with the clearing process and how Bond sales

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are not a way to finance spending but it’s really to drain the the the the reserves that are out there um to allow

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Central Bank to Target their interest rates and so on and so forth so it’s really a description of how the real

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world uh public monetary system works and private monetary system by the way um but it does come with certain policy

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implications right and again it depends on uh who you ask some believe you know

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knowing the power of money right knowing that money is a public Monopoly that we

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need to really use the money for public causes so maybe we want full employment maybe we want Universal Health Care uh

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maybe we want you know Green transition right we want to have a green New Deal um so knowing the power of public money

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right would lead us to certain uh policy implications right but it’s not this idea that government can simply spend

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like no tomorrow um but really sort of we want use the public money for public purposes um I think that is really the

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message that M tries to deliver why do you think it is that

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especially in the west Europe North America Japan to this um the classic the

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neoc classic Model um is so strong and and so omnipresent I mean if you take

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any kind of class in any kind of average University of Economics 101 micro macro

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that’s firmly thoroughly um deeply neoc the neoclassic model that kind of just

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excludes the analysis of the of the mechanics of how money circulates in the

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in the en in the um economy it use it does that a little bit and then it has

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these funny Notions of the money multiplier in order to explain things a way that it cannot account for um why is

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this approach which to me is not fundamentally wrong it just it just leaves out some of the most fundamental

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aspects of the the the way economies work why is that one so prevalent within Academia and in their minds in the heads

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of a lot of people who have a natural aversion to the idea of government you

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know using the printing press and even people that I admire a lot who have an

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adversion toward that kind of type of analysis analytical approach toward looking at how the economy

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works yeah I think you’re being very kind to say that they’re not necessarily wrong I think they’re wrong and they’re

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purposefully wrong um they’re telling the lines right that when we um you know read within Freeman right Rand re had

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this classic um statement that every page um is a lie right so it’s a lot of

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I think ideological driven myth and I think that is really what it is right it

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serves the purposes of the controlling Elite right the idea that money is

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scarce so you know there are certain things we can’t do because we can’t afford right so you wanted to give

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billion billionaires uh PX Cuts we can do it but no we can’t provide free

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education we can’t provide free healthare because we don’t have the money so I think you know it’s a very

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powerful and very dece deceptive narrative and it really serves the interest of the ruling class right this

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idea that um if you don’t have the money you cannot do all these things and you have to sacrifice in order to get the

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money um and you know it just deprived all the general public right from participating

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in that Democratic set process of how to use the money right for that public

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purposes and so I think that is really why it’s um these kinds of myth right is

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really being uh propagated and it’s also really being supported by all these Elite universities and so when it comes

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to academics I think you’re right for one there is a very simple very simplistic narrative right and sometimes

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it sounds very intuitive like I gave my students some of the uh texts from uh new Fran’s page uh a book right so it

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talks about how we’re all in independent but we’re all interdependent because you

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know there’s the market there’s the seller there’s the buyer everyone is autonomous everyone is mutually drawing

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in you know get into the market and and and have that mutually beneficial exchange it just Paints the picture um

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that somehow shows a great appeal to people right there’s no power there’s no struggle everything just happen so

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naturally and harmoniously um I think people are very easily drawn to that um but at the same time I think you know

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there’s all these institutional setup that would really uh conceal or to

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silent um different views right if you don’t publishing these high level

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prestigious journals you can get a job in academics not in the IV league right and so there’s a lot of

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exclusiveness that does not allow alternative voice being heard so we peret perpetuate the kind of myth right

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and this kind myth is really what enables you know neoliberalism right this idea that this is scarce and

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there’s nothing we can do uh we just have to follow the natural law um you know we we have to just uh when the

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government runs out of money we have to you know suffer from austerity and so that means you know you don’t get all

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these um things that you need in order to survive just because we don’t have the money right so I think these are

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really powerful but unfortunately I think it’s very uh you know um uh

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delious very harmful and very detrimental um for any economic system

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um you know for the general uh purposes for the general Public’s you know uh well-being do you think that it also has

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anything to do with the the concepts we use in order to make sense of the world

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because um it strikes me that certain people who I think who should be like

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who should be loving mmt and who should be hugging it kissing it like especially

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on the Left Right lefties should love mmt because it it kind of it it shows

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exactly how to do the policies that you want to do as you just said like public education public Healthcare and so on

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because it’s not that this is too expensive or we don’t have the money the question is how do we want to allocate

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it um and and how how how is money used in the economy in order to keep the

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economy stable right not necessarily do we have the money or not it’s like do we want to allocate or not um

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but but at the same time we are using confusing language in order to conceptualize government debt and

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government money the the same way that we use our private debt and private money and then people think like yeah

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naturally I have to save first I have to tighten the belt if I want to go on a nice holiday if I want something good

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for myself then I need to save first and that’s such a misleading way because

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these two domains don’t work the same way but you use the same language is that part of the problem

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absolutely I think there’s a lot of negative connotations to this idea of deficit and debt right but what mmt I

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think is doing great is to really utilize the so-called balance of pay uh sorry the balance sheet approach right

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so in any Ledger you have the assets you have the liabilities and um you have you know one side is being the creditors

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then the other side would have to be the deor right so when you think about the economy if you separate into the private

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sector and the public sector then it makes sense when you think about it right if the public sector is in Surplus

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where does the Surplus come from right if the public sector wants to be you know in the Surplus that means the other

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side of the Ledger right the private sector would have to be in deficit right and vice versa so I think this is you

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know very simple and very powerful idea if you just take some time to look at the balance sheets and that very clearly

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shows you that not all economic agents can run a surplus so if the public agent

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is running a surplus that means the private agent the private sector we have to run a deficit um but again A lot of

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times like you said right we always equate public deficit as fiscal mismanagement right or living beyond our

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means or you know um corrupt government and so on and so forth so I think that’s very unfortunate and you mentioned the

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left I think you know there are two types of lefts that on the one hand we have the left that really understands

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mmt and they understand the power of money public purposes public money design of monetary system for the

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general good you have people like Jason hickle right that talks about this economic demographic Democratic process

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that we wanted to use the power of money to mobilize resources for sustainable you know development for the Mankind and

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for more Equitable you know distribution of resources um you also have people like Michael Huston right that has

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really debunk a lot of this Americans Financial Empires you know misbehaves right over the centuries um so we do

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have people who are you know on the left and they are in Tien they understand the nature of money and that has really

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empowered them um to to really put forth their policy proposals and also the

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analysis of capitalism but you’re right I think we also have some lefts um who I

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think in some ways misread car marks right that believe that money is a commodity and I think that’s very

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unfortunate and and of course there’s also a lot of really deep rooted right like we just mentioned this myths um

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that somehow still believe that money is scarce um that somehow still the public sector with the private sector that

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still somehow things the government you know only works for the Elite Class which is in many case true right but

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that doesn’t mean we should just simply give up right that is still a very strong and very you know important

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institution um that we need to um you know take control over with right not

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just sort of you know let it be yeah it’s it’s quite fascinating and you know

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the interesting thing is as you said before like the if if mmt is right and I

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I would say it is um at least in the largest parts then um that’s actually

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the way the modern economy works I mean it’s not that this is a way that that the mmers would like to change the

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economy it’s already running like that it’s just we don’t we don’t we don’t perceive it in the right way therefore

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we have stupid concepts of what then needs to be tweaked in order to get like a certain outcome but that also means

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that there is a lot of people and a lot of clocks in the in in in the in the system a Cox in the system that already

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lead to to an an mmt way of the economy working right and like Central Bankers

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or private Banks as well right when they make when they make mortgage loans and so on they add to creating money and and

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so on and so forth now um how or which

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parts of the economy and let’s say Western economies but also now um Global South economies especially let’s say

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China uh and and maybe Russia if you know but let’s let’s focus on China because I think that’s where your

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expertise is um to which extent do these economies actually understand or the

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people who are who are pivotal especially the central bank has properly understand how the economy works and or

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or at to what degree are people in charge that actually might not have a complete picture of what their impact on

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the economy is yeah I think that’s a great question I think you know what I’m most

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interested is how mmt can inform right development policies and development

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processes um I think there’s still a lot of confusions um I think of even within the mmt community right um but to the

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great majority of the people even if they have some kind of faith in mmt they would say this is really a privilege

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that the United States or Japan or these you know Advanced Western economies could enjoy the kinds of uh sort of

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monopolies on money right that all these developing countries they simply don’t have the luxury to control their own

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monetary system and therefore use money for their own purposes and I think to some degree it is true a lot of

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developing countries are lot more constrained given the current Global Financial system what I mean by that is

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a very important Concept in the mmt that is a so-called monetary sovereignty right which is the idea that to what

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extent the government is able to uh pronounce a or hates a unit account and

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impose certain obligations um which can be delivered by

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you know uh getting or sending in these uh or repaying uh these obligations in

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that uni of account so what I mean is in the United States right we’re using the US Dollars and you are paying taxes in

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the US dollars right so you have the desire to have the US dollar um so that

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is allow that that’s what allows the US government to be a able to appropriate resources right because people want your

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money right and and so you are able to by issuing this this money and making

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people work for it right so you’re able to mobilize the resources right for your

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own uses and for general public uses now in some developing countries um they are

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issuing their own currencies but there are also others that are not right so we’re talking about El sador we’re

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talking about you know alador Ecuador um they are socaled dollarized right and

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sorry they they’re dollarized right and we also have you know some of the eastern African countries are still using the CFA Frank as their currency so

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these are some of the countries that have very limited monetary sovereignty because they have no control over the

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currency right so they can’t simply you know issue um the currencies and allow

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the government to spend and and they can’t set their Central Bank policies because the interest rate is pretty much

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set by the fed or the ECB so these are the countries that really low in the monetary sovereignty and they cannot use

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money right to do all these other wonderful things but there are also countries that are issuing public debt

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in foreign currencies so we’re talking about countries like Kenya Ghana Ethiopia and and many of the low income

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countries um they suffer from the So-Cal original sin right the idea that um

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their own currencies are not desired in the international market and so if they want to import any essential products

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they have to issue dollar bonds borrow in dollar or Euros in order to support to to support their economy and so these

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countries are also low in terms of their monetary sovereignty because again they are getting in debt in a currency that

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they have no control over with okay but still I think the great majority of the

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uh I would say middle income or low to Middle income or even high to Middle income countries they still have a large

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degree of monetary sovereignty they’re using their own currencies they’re able ble to impose taxes they’re able to

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reflux the currencies back um they have relatively you know large autonomy in

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terms of fiscal and monetary policy making then I think that’s place where they can utilize you know that kinds of

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monetary power now to your question I don’t think every single policy maker in the world um has a complete grasp right

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of what mmt is about and therefore take policies um based on the recommendations right of the mmt scholars but I do think

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in terms of China um they do have a very stringent fiscal rule um that they

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pretty much take from the Western economy right 3% deficit to GDP ratio 60% public debt to GP racial but again I

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think the Chinese way is very interesting I’m writing a paper on the big government in the CH with Chinese characteristics I know it’s a very

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criche title um but what I show is that this the government actually has four different books they have the or the the

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the normal operational budgets where they they really stick to the 3% rule um

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sometimes they will raise it a little bit during covid they increase the debt the deficit juriu ratio you know from 3%

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to 3.5 to 3.8 but still they have that fiscal rule but that said right there

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are a lot of other parts of the government spending that it’s not really consider as a normal budget um so they

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kind of you know when you look at the IMF for example they would say China’s augmented fiscal deficit it’s anywhere

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between 9 and 10% of the GDP and so that is basically some other sort of BU they’re not counting into the official

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budget they’re also local government spending right which we know these days there’s a big discussion about local

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government debt right because the local government is responsible for 85% of the fiscal spending in China um and so

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there’s a lot of debt that is in the local government at the local government level off their balance sheets um so I

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think that really you know in a way it really help China to use this fiscal um

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um you know fiscal uh policy right to help with the economic growth right in

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China we talk about the mayor economy right so local economy are really playing a very critical role in

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supporting their local economy and so I think that is really you know the government is utilizing the fiscal tool

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to help the economy even though they don’t publicize it so I think that is this is the interesting um aspect of the

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Chinese economy yeah that’s let’s let’s talk about this a bit more um and you

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know I I know very very little about the Chinese economy um the especially the way such a

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large social um um entity works I mean it’s 1.3 billion people 1.4 billion people

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which is humongous and I mean one thing about China is that okay it is it is one

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country it is it is one one large micro economy but it is so large that this

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that this entity must have very sophisticated ways of of of guiding its

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internal mechanisms right I mean just the fact that China also doesn’t have a complete freedom of movement um the way

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that you have it in in in in let’s say let’s say the US I mean the there’s certain if you are born in a certain

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region and then you can move to a city but you cannot necessarily access its social infrastructure the same way that

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locals can right there is not complete um Unity about everything which is

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import I mean you need to manage somehow the flow of people right um does that also extend to the monetary realm um is

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the or in what in what way does the the Yuan work um is it one

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single system or are there several kind of steps also with like the China’s experiments with um with digital

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currencies um is it one system or is it actually you know like many many

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different ones under one umbrella yeah so um it is in a way

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unified system right so China is a uh you know um with one Central Bank which

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is the People’s Bank of China right that is uh the agent right that implements

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monitor policy that has the full control of the currency and of course you know the Ministry of Finance is also um the

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fiscal branch of China um so China is actually the unitary state right so the

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central government has all the you know decision-making power and but a lot of

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implementations on the ground operations are differred and relate to local

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governments um so in this case um I think you know when it comes to monitor

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policy yes the PB is still the one that makes the decisions even though it does

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have different tools that it relies on compared to for example the Western the Western usually has open market

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operations and there’s a F funds rate that is a fundamental interest rate target in China it’s a lot more

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complicated it used to also uh there are different you know lending facilities um

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there’s different interest rates that they control you know there’s say deposit rates that they have the guidance they have the pre L pre rates

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they have the you know uh 7day repo uh reverse repo rates so there are many

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different instruments that the Chinese Central Bank has but nonetheless it is still a centralized monetary system

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where the central bank is in charge of this monetary policy right and they can through again different policy

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instruments um The Reserve requirement ratio is one of the ones that the Central Bank often use in China but not

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very much by the FED for example um and this is a way to kind of regulate how much liquidity um and also how much is

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the cost of the bank lending in the economy so they do similar things as the West you know central banks um and they

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also have the complete control of the monetary system now in terms of fiscal system is also very interesting um China

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had a one really big fiscal reform in 1996 and that’s where it sets the

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central local relationship right that a lot of tax over half a little bit over

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half of the taxes would go to the central government and mostly is the um value added tax um not as much income

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tax personal income tax um so a lot of the half of at least half more than half of the tax goes to the central

27:55

government and yet the local governments are asked to be responsible for a lot of this spending right they spend for their

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local economies they spend to deliver some essential public services and public programs at their localities and

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so that creates really much this imbalance um that you know sometimes the central government orders the local

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government to put on certain projects but then the financing uh needs right is

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not being supported by the central government so the local government will have to pay the bill so to and the

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important the important thing of course is that under mmt national government can can

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appropriate limitlessly but local governments can’t they they are very much need these little taxes that mmt

28:38

says on on the big one you don’t need so how does China solve that problem yeah that’s great I think you you really hit

28:44

the nail on the head and that is precisely the problem right so when you have the central government that is only taking on about 21% of the GDP worth of

28:52

debt and the local government is taking you know over 50% and then plot the hidden debt and that is anywhere you

28:59

know everybody’s a guess right but at least you know 90% of GDP is debt at the local government level and so that is

29:06

really problematic because the central government has like you just said right the monetary sovereignty they’re able to

29:12

issue the currency they’re able to you know uh fiscally spend the local governments can’t right and it’s not

29:18

until 2014 that they’re allowed to issue bonds actually previously they they are not even allowed to issue bonds right so

29:25

that really leave them in the limbo so if you ask me what to do I think you know the solution is very simple you

29:31

have to reely right your fiscal revenues and your spending responsibilities

29:36

that’s as simple as it gets if you want the Lo local governments to continue to spend if you believe the spending should

29:41

take place in the local level then you need to give them more taxing power you need to give them more tax revenues but

29:46

does that mean does that mean that under your analysis at the current time um

29:52

China is running this huge problem that its Lo local municipalities are actually getting into debt that without National

29:59

reform they will not be able to get out of which is like funny because that’s usually not what mmt argues but on the

30:05

local level it is like that yeah yes it’s precisely that it’s precisely that

30:10

so it’s it’s a it’s a very um misconstrued I think the system right

30:16

that the central government has all the power to spend and yet the local government is asked to take on all the

30:21

debt and to spend and so you know if we’re talking about this in a political vacuum right I would say the solution

30:28

very simple we can solve it tomorrow right just make sure either you increase the fiscal transfer from the central

30:34

government to the local government which is what China has been doing right now the the central government’s fiscal transfer accounts for about half of the

30:41

revenues of the local governments um that helps right but at the same time the fiscal transfer has many many

30:48

difficulties right one of the things is that when it transfers it goes through different levels right from the provincials then to the city to the

30:54

county and then to the Village so through this whole process a lot of times the money just disappear right in

31:00

the middle in in the in the black hole and so that is not very efficient um so

31:05

but there’s other ways that you can do it right so like I said you could have a fiscal reform to allow the central

31:11

government uh to you know to to to give more taxing powers and revenue uh to the

31:17

local government revenue shares to local government right so all these can be done there’s no technical barriers for

31:23

any of these to be accomplished right it just stroke a pen you can make it happen tomorrow so why is it not happening

31:30

right that definitely has to do with the political uh considerations right because again China the you know the the

31:36

the the top leaders wants to centralize the power they do not want to distribute the power so much to these different

31:42

localities which you know you would understand with a big country with 1.4 billion people with so many different

31:48

provinces right you worried about that kinds of you know power diffusion and I think that political it’s the political

31:55

barrier right is what prevent the kinds of systematic reform um China has been talking about fiscal reform for decades

32:01

right it’s not just years every time they talk about we need to have a fiscal reform and nothing really happened and

32:07

even today as you just talked about right China’s economy has some headwinds the local government debt is a problem

32:13

but the central government still very hesitant to anything dramatic right anything that is sort of a fix a real

32:20

fix right they simply dodged the problems um they allow the local governments to equal issue more debt

32:26

they themselves more central government debt and then fun all the money to the local governments um there’s still a

32:33

very you know I would say in some insurmountable hesitancy right to

32:39

relinquish the kinds of power to the different local governments and they also worry if you help the local

32:44

governments this is going to create more moral hazards right the local government say oh I don’t need to pay for this I’ll just spend like no tomorrow and so that

32:51

is really what I think underline uh the problem and the concerns yeah but is there at least a um a

32:58

a fiscal transfer mechanism in place in China because you know the EU doesn’t

33:03

have that the EU has a not the EU sorry the the the Euro the Euro EUR area the

33:09

Euro Zone has a single currency but no way of transferring uh money from from the the

33:19

better performing economies better performing it’s the wrong it’s the wrong expression from net exporters to net

33:25

importers right um there’s no way to transfer the money back and then what what happens is that naturally one

33:32

accumulates all of those monies and the other one the other one just just loses out and has to go into further debt and

33:39

you know when things go really bad they go Greek bad and it’s not necessarily the fault of the Greeks it’s the fault

33:44

of the way the system works um and it’s because there’s no fiscal transfer mechanism swis Switzerland the 26

33:50

cantons it has a fiscal transfer mechanism does China have that um so that at least some imbalances inside

33:58

the economy are smoothened out precisely China does right so China

34:04

is not the Euro Zone um the Euro Zone countries like you said exactly there’s no fiscal integration and and mmt

34:10

starting from the day one has questioned this design flaw of the Euro Zone that

34:15

you have monetary integration but you don’t have fiscal integration um but at the same time you know institutions are

34:21

beenade so if the ecbs could purchase you know government securities in the

34:26

unlimited way during Co it could do it any time um but it’s again the political barriers the ideologies right and and

34:34

also I would say maybe also you know some of these uh um um geopolitical you know sort of factors

34:43

all of this could prevent you know this kinds of fiscal transfer from happening uh within the Euro zone now in China um

34:49

there is fiscal integration um and when it comes down to it I think the central government will help the local

34:56

governments um but again like I mentioned earlier there’s all these political factors that prevent the

35:02

system from being revamped right in a very fundamental way but they will fix

35:07

the problems in the patchwork kind of manner right like which government is is it’s not working now it’s you know it

35:14

needs a bail out the central government will do that right and they do have the fiscal transfer as I just mentioned they

35:19

have two different types of transfer they have transfer that is for specific purposes like if the if this province is

35:26

building a dam right then the central government say oh I will transfer some money specifically designated ear marks

35:31

for that project but otherwise there’s also the general purpose transfer which is basically okay this locality has def

35:38

deficit and debt problem we will help a little bit but again as you see this is a very um uh sort of the after the fact

35:46

right it’s not the proactive it’s not the preemptive kind of uh um system um

35:51

but if things really go wrong Central Bank central government will uh will have to intervene right so I think that

35:58

that’s that’s the difference right so yeah they do they do little evolutions of the system in place instead of of a

36:06

general overhaul which is also a Pruden approach by the way because whenever you do big overhauls you the wrecking Hammer

36:12

could really destroy stuff last question on China um in Western media when we

36:17

talk when we hear about the the the problems of the Chinese economy it’s usually somehow connected to uh the real

36:24

estate crisis and and real estate is in is in is in is in huge problems and

36:30

China will collapse and blah blah blah blah and that’s something that’s very easy to understand for the West because

36:37

the real estate is usually what blows up the Western economies that’s what blew up in 2008 like that was the root cause

36:43

so it’s really easy to map that but are you more worried about real estate problems or banking problems or are you

36:50

more worried about the local um uh local governments inability to manage their

36:56

funds which one of the do you think is actually the bigger problem but that’s a very interesting

37:02

question um I do think the local government debt is a bigger problem even though I think those two are completely

37:08

connected right because the local government used to really rely a lot on land sales um and also these real estate

37:14

development to revive and to you know boost their local economies so when the real estate sector uh is in a slump that

37:22

affects the local government’s revenues and therefore that exacerbates the Deb

37:28

problem um I would say you know the real estate challenge is real um it’s real in

37:34

the sense that there is the supply side factors right I’m sorry but economists

37:39

are funny they like to compartmentalize the problem right so there’s the supply side problem which is that you know real

37:45

estate used to account for 20% of GDP and if you include all these other related sectors that’s like 30% of the

37:52

GDP and so without that real estate construction you f to be see that investment goes down and the economy

37:58

slows down but I think China is managing now very well uh I would say In This Very sort of controlled demolition of

38:04

the housing bubble nothing like what the United States has you know did Has Done Right let the market explode and take

38:12

down the entire economy took more than 10 years recover and Japan right that’s even worse um I think China is doing it

38:19

in actually a really measured way and so far I think the uh collateral damages

38:25

have been well under control um the reason I say that is because we see a

38:31

large economic activity shift from the real estate sector to uh manufacturing

38:37

sector right especially the p and investment and Hightech investment has been going up by 10% in the last few

38:44

years so a lot of bank loans used to go to the real estate sector now they’re

38:49

diverted to the industrial sector so now if you look at the changes the real estate sector has gone down in the GDP

38:56

to about 18% and then you see the industrial and and especially manufacturing sector has rised up to

39:01

fill that void so I think from the supply side I think China is making that transition rather successfully the

39:08

difficulty of course is on the demand side what it means is that you know real estate is 70% of the households wealth

39:16

um you know 93% of the Chinese families own a house right and a great proportion

39:22

of people hold more than one house they use the housing as investment assets so when the house hous in value is going

39:28

down right in some places 20% even 30% or whatever the number might be um because the government number for that

39:35

is definitely tricky right that create a problem because households feel less wealthy they spend less and they’re not

39:42

buying houses so they’re not buying household appliances and so on and so forth and so that created a lot of

39:48

demand side problems that’s why you hear all these s uh uh um demand deficiency

39:53

problems in China which I think is a is a is a problem problem um so but at the

39:59

same time I think you know if we gradually stabilize their housing market which is exactly what the Chinese

40:05

government now is doing right they’re trying to tackle the two biggest problem in the housing market one is the

40:10

unfinished uh housing projects um they allow the banks to put these uh housing

40:16

projects in their on the So-Cal white list so allow them to take band loans and finish the projects because people

40:22

already pay for them right you need to deliver them um second is the housing inventory right so Goldman Sach said

40:28

that China has about s trillion un worth of inventory that needs to be GED off um

40:34

and so again in the recent weeks and months you see the slew of policies

40:39

where local governments purchase these housing for social housing purposes right and also you know uh um remove the

40:47

a lot of housing restriction uh housing purchase restrictions right like um I’m from originally from guango city right

40:54

the third largest city in China um they basically scrapped all the housing purchase restrictions right and so that

41:01

really helped to in a way you know increase the demand a little bit and helped to stabilize the prices in the housing market um so at least right now

41:09

some of the um uh you know the the more micro level data has suggested that the

41:14

transaction has gone up by a lot right in places like Shanghai or Beijing you

41:19

see anywhere between 30% to 50% increase in the housing deals just in the month of October so the market is reacting so

41:27

that would help to stabilize the price and as a result this is going to make people feel better in terms of the housing values and boost your confidence

41:34

and go out spend more I think that would be really helpful um to the economy

41:39

[Music]¹

oooooo

BRICS Financial System Will Be Like NOTHING We’ve Seen Before | Prof. Yan Liang

(https://www.youtube.com/watch?v=Wg5YGKcwfrI)

[Part 2 of 2] The BRICS financial system won’t be a copy/paste of western institutions and it will certainly not be a second “Euro”. Nobody would be that foolish again. Instead, the financial architecture will be a decentralised system build on the convertibility of currencies and potentially a common unit of account to replace the dollar’s function as a world wide price tag.

This is the second part of a talk with Dr. Yan Liang, a Professor of Economics at Willamette University, a private liberal arts college in the US. She is also a Research Associate at the Levy Economics Institute and a Non-Resident Senior Fellow at the Global Development Policy Center of Boston University.

Yan specializes in Modern Monetary Theory (MMT), the Political Economy of China, Economic Development, and International Economics.

Transkripzioa:

0:00

and then one last thing about I think

0:01

you know in terms of system design and

0:03

breaks I still hear a lot of the

0:05

discussions about what kind of common

0:08

currency we need um or what needs to be

0:12

the back of this currency is it going to

0:13

be oil is it going to be gold or some

0:17

special Commodities I think there are a

0:19

lot of misconceptions in terms of what

0:21

really the sort of currency is right it

0:23

is not going to be a common currency

0:25

that replace the national currency

0:26

please don’t do that right the Euro

0:28

lesson is should be well learned

0:30

um but we could have a common clearing

0:32

unit for countries to clear up their

0:34

trade and clean their clear up their um

0:37

investment exchanges and so on so forth

0:39

and that does not need to be backed by

0:41

anything right this is a Fiat money

0:43

we’re talking about this is a unit

0:44

account this is a accounting unit that

0:47

we’re talking about so I think there’s a

0:48

lot of misconception about that and I

0:50

think that needs to be debunked and

0:52

finally I think you know what the bricks

0:54

has been doing really well um the NDB so

0:56

um the new development Bank yes has been

0:58

talking about is we wanted the increase

1:00

local currency borrowing right to 30% um

1:04

and I think that is really the right you

1:06

know step that’s that’s a step to the

1:08

right

1:15

direction okay thank you very much for

1:17

that overview and maybe we lose use the

1:19

last 50 minutes we have to talk about

1:21

another uh subject that that you uh um

1:25

working very much on which is the

1:26

connection between mmt and developing

1:29

economies or like how how let’s say also

1:32

Global South countries I like that

1:34

expression much better because like for

1:35

a lot of countries calling them

1:37

developing doesn’t make that much sense

1:39

anymore like if you think of Malaysia or

1:41

Indonesia which like have sectors that

1:43

are that are that are booming and

1:45

fantastic they just work a bit

1:47

differently uh uh from from West uh uh

1:50

uh Western countries but um if

1:53

we what what does your research at the

1:56

moment suggest of how smart um smart

2:01

strategies should be designed

2:03

economically in order to also support um

2:07

uh Global South Global South countries

2:10

to really live up to their full

2:13

potential right so what I would address

2:15

is that from an mm’s perspective I think

2:18

really a genuine and and Progressive

2:20

development strategies would work on

2:22

three different levels so for one is at

2:24

the national level I think the

2:25

government needs to understand their

2:27

policy choices for example if you want

2:30

fix your exchange rates if you want to

2:31

borrow in foreign currencies that could

2:33

put yourself in a very vulnerable

2:35

position so what you want to do is try

2:38

to mobilize your domestic resources as

2:40

much as you can so one of the examples

2:43

that I often you know want to tell even

2:45

if it’s you know for countries that are

2:47

in the brri projects for example Kenya

2:49

right that borrow you know Chinese money

2:51

to invest in their uh Railways and yet

2:54

at the same time they’re talking about

2:56

you know 60% of the materials are

2:59

localized

3:00

so the question is if you are able to

3:02

use your domestic currency mobilize your

3:04

domestic resources then why do you need

3:06

to borrow external externally right and

3:09

you’re borrowing in the dollar which you

3:10

don’t have control over with so to me I

3:13

think it’s very important for um you

3:15

know Global sales countries to

3:17

understand that they need to mobilize

3:20

their own resources they need to really

3:22

strategically invest in their energies

3:25

in their food in the technological

3:26

sector in their human capital right I

3:28

hate that word but you know but it’s

3:30

common for people to refer to that so

3:32

it’s really need to be uh you know

3:34

really understand that development

3:36

Finance should come primarily from

3:38

within um I actually have a paper that

3:40

it’s exactly about that um so that is at

3:43

the domestic level at the regional level

3:45

I think it’s very important for Global

3:47

Sal countries to build that cooperation

3:49

and consolidation and and solidarity and

3:53

and and collaboration um because again

3:55

developing CES is actually really

3:57

resources Rich right when think about

4:00

the G7 countries which you know again

4:02

many of them are like you know I I I

4:05

would say Japan for example right where

4:07

you are um they are very resources uh

4:11

scarce right so as a matter of fact that

4:13

developing sou countries are very rich

4:15

in their resources the difficulty of

4:17

course is you know um some countries

4:19

have certain resources others don’t

4:22

right um so I think it’s very important

4:24

for the the regional economies to work

4:26

together right they build this

4:27

development Banks they have trade system

4:30

they have investment system that would

4:32

really help them to leverage on their

4:34

respective strengths and help out each

4:36

other and I think that is very important

4:38

so by Regional I don’t mean just the

4:40

geographic right it could be countries

4:42

like bricks right that their energy rich

4:45

um they have a lot of complementarities

4:47

in their trade um they could work

4:50

together to advance their common

4:51

interest and then at the international

4:53

level um I strongly advocate for a

4:55

reform of the International Financial

4:57

architecture right these post wood

5:00

system the IMF the World Bank um I think

5:03

they are really out of place right they

5:05

they they they were old they were 80

5:07

years old um they were sered they were

5:09

serving the the the the Western Count’s

5:13

interests um they’re being in very

5:16

incapable right and I think purposefully

5:19

so um not to finance climate change and

5:22

not to finance development and and not

5:24

to provide really strong International

5:27

Financial safety net so I think that

5:29

system needs to be revamped so I think

5:31

that would be you know I think it’s a

5:33

very ambitious uh policy or proposal

5:37

right but I do think that all these need

5:38

to happen um for us to really to talk

5:41

about you know sustainable development

5:43

and cope with all these other CH

5:44

challenges that the global Sals faces

5:47

and parts of excuse me parts of that are

5:50

happening actually and now with the the

5:52

movement around the braks right which is

5:54

does will not replace IMF and World Bank

5:56

but it will create it is working on

5:58

creating an alternative but that still

6:01

doesn’t alleviate us from the

6:03

responsibility to design or to

6:06

understand what are smart local as in

6:09

National policies for development and

6:11

what are dumb ways of doing National

6:13

development so question why is it that a

6:17

lot of countries when they when they get

6:19

foreign um um when they when they um

6:23

have development projects with like uh

6:26

Western countries the US Japan um or

6:29

even like also with with China China

6:31

does a lot of of um infrastructure

6:34

projects right why is it that a lot of

6:36

these National Global South countries um

6:40

then borrow money in the foreign

6:43

currency as you just said borrow Yuan or

6:45

borrow USD and then get indebted in that

6:48

foreign currency which again is the

6:50

original sin under mmt this is what what

6:52

you cannot get your head out of if you

6:54

if you if you run out of that currency

6:56

in your in your in your um balance

6:57

sheets right instead of I mean the other

7:01

way to do it would be to issue Bonds in

7:04

your local currency get local currency

7:07

use as much of it as you can in your

7:09

economy and the part where you need to

7:11

import like let’s say some high-tech

7:12

stuff from Japan a couple of trains or

7:14

from from China import those trains and

7:16

you need to pay new one you just use the

7:19

the the good old FX exchange and you

7:21

just exchange your currency instead of

7:23

borrowing and why is that not the

7:25

mechanism that is used why is it the

7:27

borrowing that’s used

7:30

yeah I think this is a great question I

7:31

would say there are two major reasons

7:34

one is there are this constraints right

7:36

the original sin is is one of them so

7:39

you mentioned something like can we just

7:41

do currency exchanges right the

7:43

difficulty again is um some of the

7:45

countries simply can’t get a reasonable

7:48

uh rate or simply no country right

7:52

wanted to accept um you know certain

7:54

currencies right so when you have

7:56

hyperinflation you know let’s say you’re

7:58

in Zimbabwe or if you are in Argentina

8:01

right you have the peso it would be very

8:03

difficult for you to buy to to have the

8:05

buyers of your currency and get that

8:07

foreign exchanges so I think there is a

8:10

real constraint in some ways for

8:12

developing countries um but that said I

8:14

also think that there are a lot of

8:16

misunderstanding the the idea that oh if

8:18

I borrow foreign currency it’s going to

8:20

be cheaper right because I’m paying

8:21

lower interest rates but they’re not

8:23

really thinking about you know if you’re

8:26

paying interest rate in your own

8:27

currency you can literally pay whatever

8:30

interest rate that you need to pay right

8:32

there’s no limit for you to issue your

8:34

currency there’s no payability issue in

8:37

this case right um the constraint of

8:39

course is inflation but you’re not going

8:41

to run out of your own currency this is

8:43

what I’m saying right um but a lot of

8:45

developing country are thinking about oh

8:46

if I borrow a foreign currency it’s

8:48

going to be cheaper the interest rate is

8:49

going to be lower so it’s less costly

8:51

for me so I would rather do that which I

8:53

think again this is this is very

8:55

unfortunate right that they shouldn’t be

8:57

doing this they are much bigger cost

9:00

um that is hidden than just the interest

9:02

cost that you are seeing right on your

9:04

book um but going back to the previous

9:06

constraints um there are times that

9:08

countries would have to borrow in order

9:10

to like what you just mentioned some the

9:11

essential technology that they that they

9:13

don’t have or some of the essential

9:15

materials that that they can’t buy at

9:17

home so maybe they would need to borrow

9:19

a little bit in those foreign currencies

9:21

in order to import those things um but

9:24

again I think by having this Regional

9:27

collaboration but also be very strategic

9:30

about how much you want to borrow and

9:32

when you borrow also make sure that you

9:34

really um have good balance sheets

9:36

management avoid very large persistent

9:40

currency mismatch and duration mismatch

9:43

so there are ways you can both economize

9:46

the need to foreign borrow but also

9:48

manage that borrowing in a more

9:50

sustainable way um so that’s one of the

9:53

reasons I think all this idea of debt

9:55

sustainability assessment that is you

9:57

know uh engineered by the IMF needs to

10:00

be revamped countries need to think

10:03

about what currency they borrow in they

10:04

need to think about what they do with

10:05

the debt right if China goes in and and

10:08

land and you build these um Power

10:11

Generation projects you build these

10:13

Railways or you build these

10:15

infrastructure that is going to really

10:17

help you to strengthen the economy and

10:19

produce cash out inflows in the future I

10:23

think those Deb should not weigh the

10:25

same way as you are using your debt use

10:28

your borrow gr using foreign currency to

10:31

buy you know luxury goods right from

10:34

from outside of the country so I think

10:36

that needs to really be thought through

10:39

right by the policy makers um what to

10:42

borrow how to borrow how to use the

10:43

foreign currencies I think that is very

10:45

important and then one last thing about

10:47

I think you know in terms of system

10:48

design and breaks I still hear a lot of

10:51

the discussions about what kind of

10:53

common currency we need um or what needs

10:57

to be the back of this is it going to be

11:00

oil is it going to be gold or some

11:03

special Commodities I think there’s a

11:05

lot of misconceptions in terms of what

11:07

really the sort of currency is right it

11:09

is not going to be a common currency

11:11

that replace the national currency

11:12

please don’t do that right the Euro

11:14

lesson is should be well learned um but

11:17

we could have a common clearing unit for

11:19

countries to clear up their trade and

11:21

clean their clear up their um investment

11:24

exchanges and so on so forth and that

11:26

does not need to be backed by anything

11:28

right this is a money we’re talking

11:30

about this is a unit account this is a

11:31

accounting unit that we’re talking about

11:34

so I think there’s a lot of

11:35

misconception about that and I think

11:36

that needs to be debunked and finally I

11:39

think you know what the bricks has been

11:40

doing really well um the NDB so um the

11:43

new development Bank yes has been

11:44

talking about is we wanted to increase

11:46

local currency borrowing right to 30% um

11:50

and I think that is really the right you

11:52

know step that’s that’s a step to the

11:54

right direction um that that’s what

11:56

needs to happen yes

11:59

I’m very interested in this one because

12:02

how how would it work um we’ve had this

12:05

moment in the in the the creation of the

12:08

Euro when the Euro was just a unit of

12:10

account but not yet physical um Fiat

12:13

money it was just used on the exchange

12:16

um is what you’re thinking about with a

12:18

common clearing unit a form of that and

12:22

how how would it work if we have a unit

12:24

that you can just count debt in across

12:28

um different economies but then the

12:31

individual the individual economies

12:33

would still run on their own currencies

12:35

because there would be all of these

12:37

fluctuations and also the changes in the

12:39

exchange rate to the common to the

12:41

common unit right so in what sense would

12:43

this be an improvement rather than a

12:47

complication well this current uh unit

12:51

it’s really just to clear your trade

12:53

balance and your investment balance um

12:55

and that happens between different

12:57

central banks so it’s not going to be

13:00

integrated into your domestic economy

13:02

and there’s no exchange rate sort of

13:05

conversions um at the clearing unit uh

13:09

uh system so for example if I am uh you

13:13

know buying from you or you are selling

13:15

to me and we do this exchanges at the

13:18

end of the day we’re using everything

13:19

right to to use this common unit to

13:22

denominate our trade and so yes there

13:25

there will be sort of you know your

13:27

currency is going to worth different

13:28

with the ratio of this currency and my

13:31

would would be different but when we are

13:33

clearing between us we’re using this

13:36

common currency and not really connected

13:38

with with our domestic currency so that

13:42

way um you may be able to earn more of

13:44

this Caron currency and I may earn less

13:47

and so you know our exchange rate would

13:49

be different but it doesn’t in any ways

13:51

affect our own economy right all we are

13:54

exchanging is this common unit and what

13:56

is more important I think uh than just

13:58

using this common currency to denominate

14:01

and clear the debt between us or the

14:03

credit and debt between us is the fact

14:05

that you know really looking at kings’s

14:08

idea of this International clearing unit

14:11

ICU um I think the more fundamental

14:14

question here is that how do we set up a

14:16

system that prevent the country from

14:19

accumulating this

14:21

ICU right I think that is more of the

14:24

problem why because in the current

14:26

system we have countries that really

14:29

wanted to always run net Surplus yes so

14:32

they’re able to get the currency and

14:34

build up the reserves and and so on so

14:36

forth right and so that could create a

14:38

bger than Begg a bger than neighbor

14:41

effect and that could create a

14:43

deflationary demand deficiency for

14:45

everyone so really the question here is

14:48

whatever currency that we use we wanted

14:50

to make sure that countries don’t

14:52

intentionally try to accumulate that

14:54

common currency and profit from you know

14:57

the neighbors’s demand and so that is

15:00

really the key because I think the the

15:02

biggest difficulty right now in bricks

15:04

is that you have China for example that

15:06

is a big exporter net exporter right and

15:09

so that’s why you when people were

15:11

saying you know the UN is gonna rise

15:13

well but then if China is running

15:15

Surplus and countries can’t get the Yen

15:17

then how it going to clear that that can

15:20

be done so I think really what the

15:22

system needs it’s not some technicality

15:24

you know sort of it’s not the technical

15:26

issues it’s not about currency

15:28

fluctuations or not it’s not about you

15:30

know what currency we exactly use for

15:32

clearing purposes but rather how do we

15:34

build a system that does not encourage

15:37

one country to accumulate right the the

15:40

the units and derail the entire system

15:44

that’s funny because that that’s the

15:45

same problem that we discussed before if

15:48

you’re a net exporter you will end up

15:50

with more cash and even the ICU will

15:53

lead to the same will lead to the same

15:55

fundamental conclusion so what you need

15:57

is a fiscal transfer

15:59

mechanism which I don’t think any

16:02

country would would would want to do

16:05

because the idea is if I have a lot of

16:06

that that ICU then that’s my wealth then

16:08

I can I can buy from abroad and they

16:10

have to do as I say as it has to do as I

16:12

say I mean it’s just beneficial to me

16:14

right just nice to be on that side of

16:18

the Ledger you you yes absolutely right

16:20

if you start already accumulate that you

16:22

know currency then fiscal integration

16:25

fiscal transfer become inevitable so

16:27

there need to be cles there need to be

16:29

measures that prevent this from

16:31

happening in the first place so what K

16:33

has proposed for example is to say that

16:36

for countries that accumulate these uh

16:38

units they need to be they will be

16:40

punished if they don’t spend if they

16:43

don’t use their units to import from

16:45

other countries um then this units could

16:48

be appropriated or you have to pay a

16:50

heavy interest or whatever yeah but we

16:52

have a problem because appropriated by

16:54

who if this is a distributed system

16:57

without a central Authority with with

17:00

Sovereign rights then who’s going to do

17:03

that right well that’s a great question

17:05

so that’s why countries have to agree on

17:07

that yeah right this is not exactly as a

17:09

fiscal transfer per se but sort of like

17:13

we will give you a certain amount of

17:14

time for you to use your clearing units

17:17

right you need to use it to import from

17:19

other countries whatever that might

17:21

be you have to invest yeah are there any

17:25

ideas for creating something that a

17:27

couple of I think Austrian so economists

17:29

had in the in the past which is to build

17:32

in a mechanism to make sure that the

17:33

clearing unit over time loses in value

17:36

which would increase the the the the

17:39

incentive to actually spend it again

17:41

right is absolutely yes you can be as

17:44

creative as you can right we need to be

17:46

more creative but the point is you know

17:48

that is the key that how do we create a

17:50

system where there’s no incentives um to

17:54

accumulate the units right to hoard the

17:56

units right you have to make the units

17:58

somehow only use as a clearing purposes

18:01

not accumulation uh uh uh purpose and so

18:04

um I think you’re absolutely right I

18:06

think it’s just we need to really think

18:08

about these kinds of questions rather

18:10

than how do we set up this payment

18:11

system is it going to be digital is it

18:13

going to be you know what kind of

18:14

messaging system we need and and I don’t

18:16

think those are the most important

18:18

points the most important points is what

18:20

country should come agree should come to

18:22

agreement with and how do we Design This

18:24

clearing units um without setting it up

18:27

to fail and I think that kind of

18:29

discussion um I think is still

18:31

relatively uh insufficient at this point

18:34

no I agree the fundamental problems are

18:36

still theoretical not practical and the

18:39

theory hasn’t changed for thousands of

18:41

years the one thing the only thing that

18:43

we’ve been agreeing on for like 3,000 or

18:45

more years is the three purposes of

18:47

money uh unit of account store of value

18:50

and medium of exchange and what you’re

18:52

saying is we need to separate them at

18:53

least a little bit in order to make a

18:55

make a working system and we haven’t

18:57

succeeded at that I mean no

18:59

even in

19:00

2024 it’s quite fascinating that we

19:02

still grapple with the same problems

19:04

right absolutely absolutely which is I’m

19:08

very happy to be connected to you now um

19:10

yandang um when if people want to follow

19:12

you where can they do

19:14

that um I do occasionally post on um X

19:18

or otherwise no Twitter previously um

19:21

also on lyen um so yeah that that’s

19:24

where I post a lot of my social media

19:27

exposures and um sometimes I would also

19:30

post some of my academic Publications or

19:33

talks and things like that so I think

19:35

that would be the best place to to find

19:37

my work thank you so much for having me

19:40

today everybody please find uh Professor

19:42

yanang on X Twitter and I’ll be in touch

19:46

we will talk again because this is

19:48

highly fascinating and relevant also for

19:50

the for the future of bricks and and and

19:52

the international monetary system thank

19:54

you very much for your time today yeah I

19:57

look forward to it yeah see you next

19:59

time

20:00

[Music]²

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