43 comments

1. MöbiusEckoOctober 3, 2018 at 7:34 am

   And this is why Morrison and the government are fighting tooth and nail to stop the Royal Commission into the financial sector being expanded as Labor has requested.

   Morrison’s attacks on Shorten over this have been the height of hypocrisy, as he badmouths him for
   “crabbing”. This is the same Morrison who opposed the Royal Commission 26 times and is now taking credit for it and is taking up Labor policy after Labor policy as his own. I was gaping as I heard Morrison criticise Shorten for a long-standing Labor policy that the Liberals had purloined. I saw Frydenberg do something similar a few days ago.

2. New England CockyOctober 3, 2018 at 7:43 am

   Well Kaye Lee, remember you only have government inquiries when you know what the outcome will be. Surely “mates”will look after “mates” in the finest Australian tradition, especially when multi-million dollar fees are concerned and desired in the future.

   Otherwise, remember the Painters & Dockers Enquiry unearthed some interesting relationships that were quickly covered up by government censorship to protect the guilty (mates).

3. RomeoCharlie29October 3, 2018 at 8:06 am

   While I realisethat the information you publish is publicly available, I am constantly impressed by your ability to draw the pieces together and make the links, even when the sources are obscure. You are a good investigative journalist.

4. PhilOctober 3, 2018 at 8:06 am

   Good work Kaye Lee – exposing these matters to sunlight does great service to our democracy that is under siege.

5. Bronte ALLANOctober 3, 2018 at 9:01 am

   Great article Kaye! Somehow everything that this inept, lying bunch of toe rags does seems to have some sort of “deal” or “angle’ that they will use to help themselves both financially & in power, to the detriment of the general public. It is as if “they” think that because they are the f*cking liberal party, it is their god-given “right” to always do anything in politics that will only benefit them or their obscenely wealthy mates! Bastards the lot of them! The sooner this rabble is voted out the better!

6. Shaun NewmanOctober 3, 2018 at 9:20 am

   The L’NP have nothing to sell except confusion. They have never put a coherent policy to the Australian people with the exception of the GST, and they were sold a pup then and bought it. Apathy is the number one problem in Australia, and politicians of all stripes take advantage of this by putting the policy in the most complicated fashion possible instead of in the simplest form

7. Henry RodriguesOctober 3, 2018 at 9:24 am

   Well said and written Kaye. I am never ever surprised or shocked or astonished that the party of thieves and crooks is in bed with the financial sector and the legal scum who protect them and profit from their dealings with them while providing lucrative ‘professional services’ to them. It quite natural that the ranks of the Liberal party are full of lawyers and accountants and public relations alumni. They are brazen bastards, just as their recently departed leader Turnbull. Over the weekend I met a guy working in the financial sector full, of praise for the party of thieves. Typically his only concern was paying less tax and wanting to keep the coal industry going because its ‘cheaper’.

8. DrakeNOctober 3, 2018 at 10:18 am

   Thank you again, Kaye.

   The book, “Game of Mates” also illustrates the same modality of the ‘revolving door’.

9. Geoff AndrewsOctober 3, 2018 at 10:56 am

   I totally concur with RomeoCharlie29’s assesment – equal with the top journalists in Australia.

10. JaquixOctober 3, 2018 at 11:29 am

    Add me to the list of Kaye Lee admirers. I often think she needs wider circulation! I share as often as possible, to spread the word.
    Many thanks Kaye for all your hard work.

11. DebLOctober 3, 2018 at 11:59 am

    Why isn’t the MSM picking up all this info. that Kaye so ably finds, time and again? Very little investigative journalism happening in that arena these days. Look the other way.
    Thank you Kaye for yet another revelatory piece. May you never tire.

12. James CookOctober 3, 2018 at 12:05 pm

    Kaye Lee, you should be compulsory reading for all Australians. At the very least, the producers of the ABC’s “7.30” should have you on for an interview more than once a week. Or maybe have you as a regular panelist on “Insiders”. Jeez, wouldn’t the ABC board and the Coagulition take notice then!

13. Matters NotOctober 3, 2018 at 4:14 pm

    RE:

    incestuous relationship between government, the financial sector, the regulators …

    Hayne’s on the case:

    Too often, (the banks) have been treated in ways that would allow them to think that they, not ASIC, not the Parliament, not the courts, will decide when and how the law will be obeyed or the consequences of breach remedied.

    As West observes:

    Hayne is explicit that the banks are running the show, that the foxes are in charge of the henhouse:

    Yes the the foxes are in charge of the henhouse , particularly when it comes to taxation matters – but who is advising the foxes? Look no further than the big 4 Accounting firms.

    That this inquiry gives them (the big 4 Accounting firms) a free pass says much about the Terms of Reference. Labor should apply pressure in that direction. Go for the brains behind many of the rorts.

    Hayne says banks have corporate watchdog in the bag

14. StephengbOctober 3, 2018 at 5:06 pm

    It’s all about – Yes you guessed it – THE MONEY

    That is why it is essential that we all understand that there is no shortage of money because in a soverign, floating currency the government creates the money by spending into existance!

    Therefore the government is not constrained by the taxes it collects from it’s citizens.

    Please Kaye Lee, put your extensive skill of research into understanding MMT.

    Stephengb
    .

15. BobOctober 3, 2018 at 5:44 pm

    another elephant in the room is teh board of taxation and their list of advisors, rogues gallery much

16. KronomexOctober 3, 2018 at 5:50 pm

    Apologies but after reading this from Craig “Thuggo” Kelly, I just had to post it –

    https://www.smh.com.au/environment/climate-change/fossil-fuels-craig-kelly-liberals-climate-20181003-p507ia.html

    My two favourites from this bought and paid for corrupt excuse of a politician and cretin –

    “Addressing a gathering of members last week at the Middle Harbour Yacht Club, Mr Kelly said “we’ve always had dangerous weather” and that “even the climate has changed in space”.” Oohh, the vacuum of space has become vacuumier.

    “”The climate was always dangerous. We didn’t make it dangerous, [and] it’s fossil fuels that protect us from that climate.””

17. Matters NotOctober 3, 2018 at 6:26 pm

    RE:

    there is no shortage of money because in a soverign (sic), floating currency the government creates the money

    Tell that to the people who live in Venezuela whose (fiat) currency suffered a 700% devaluation of recent times and it’s not the only example in South America. (Other examples provided on request.)

    https://www.independent.co.uk/news/long_reads/how-venezuela-went-from-the-richest-economy-in-south-america-to-the-brink-of-financial-ruin-a7740616.html

    But at this point, MMT is nothing more than a distraction.

    Back on topic – Until, there is gaol time as a mandatory penalty for indiscretions of this magnitude, fines will be just regarded as a business expense. Companies can’t go the clink – but extremely well-paid decision makers can. Penalties of this nature tend to focus the mind.

    Re Kelly – his preselection is in extreme doubt.

18. DiannaartOctober 3, 2018 at 6:31 pm

    @Matters Not

    Craig Kelly a shining example of the LNP selection by merit …

19. Matters NotOctober 3, 2018 at 6:37 pm

    Craig Kelly is a big fan of empirical evidence. (Will someone take him aside and please explain – very, very slowly. Not Mal Roberts.)

    Kelly gets a mountain of publicity which is a very good thing. He is intellectually naked and it’s not an attractive sight.

20. DiannaartOctober 3, 2018 at 6:41 pm

    Slow explanation might work, except for Craig Kelly’s allergy to comprehension.

21. stephengbOctober 3, 2018 at 6:51 pm

    Matters not

    I am on topic, Kaye Lee has highlighted the link between government and finance, that is the link between government policy and money.

    MMT is not a distraction, it is however a distraction for those who do not, or do not want to accept that MMT is not anything but the lens that the truth about macroeconomics is seen.

    There are a many highly qualified economists who understand even if you cannot.

    http://neweconomicperspectives.org/2018/10/modern-money-theory-how-i-came-to-mmt-and-what-i-include-in-mmt.html

22. Kaye LeeOctober 3, 2018 at 7:01 pm

    People’s first speeches are often interesting to revisit. Craig Kelly said in 2010…

    “I consider myself an environmentalist. As our cities and roads become more and more congested, I am concerned about the health effects from fine particulate matter in diesel exhaust, as studies in California show that diesel exhaust leads to 9,000 premature deaths annually. That is why I oppose Labor’s intermodal freight terminal at Moorebank.”

    Moving on to 2017 and Darren Chester announces ….

    “As a part of our partnership with the Sydney Intermodal Terminal Alliance (SIMTA) the Commonwealth, through its Moorebank Intermodal Company, has committed to contribute $370 million, along with 158 ha of land. Over $3 billion of benefits are expected as a result of reduced travel time for cars and trucks and over $170 million of benefits expected from road accidents avoided by taking trucks off the road. The Government acknowledges and thanks the Moorebank Intermodal Company and SIMTA/Qube for their efforts to date in bringing the precinct to this milestone and we wish them well for the upcoming build.”

    Really, you couldn’t write a more laughable script than this lot of clowns.

23. totaramOctober 3, 2018 at 7:16 pm

    stepehngb: I once again quote from MN who refuses to actually try and understand anything about MMT:

    “Tell that to the people who live in Venezuela whose (fiat) currency suffered a 700% devaluation of recent times and it’s not the only example in South America. (Other examples provided on request.)”

    The usual hyperventilation about Weimar Republic, Zimbabwe. and now Venezuela!

    Well, Venezuela does not have a free-floating fiat currency. Your other examples will all have the same flaw. Once your currency has a fixed exchange rate, it is as good as using someone else’s currency and you are in strife. Then to re-adjust, you need to suffer a huge devaluation. So what happens then? Please do tell us what happened to Zimbabwe. Did it sink beneath the waves? No. Even Britain had to suffer a devaluation during the Bretton Woods fixed exchange rate era.. Is Britain defunct? Please do tell us.

    No understanding but pointless hyperventilating. Strawmen everywhere. Pathetic!

24. Kaye LeeOctober 3, 2018 at 7:22 pm

    stephengb and totaram,

    I have put more time into researching MMT than any other single topic. Proponents have never satisfied me when trying to answer my questions.

    Legislation would have to be changed because the government cannot go into overdraft with the RBA except in very short term emergency situations. That means they must issue bonds to make the books balance. If the RBA held those bonds, then MMT might work but the RBA are precluded from buying them direct. There also must be some sort of limit as to how much debt the RBA could carry on their books?

    No-one has convinced me of how the accounting for MMT would work. They don’t seem to think it is important. No-one can explain why every sovereign currency doesn’t just spend whatever they want to to utilise the unused productive capacity in the economy. No-one has spoken about the environmental impact of this unlimited spending or the possible impact on exchange rates. I find the argument that one of the main purposes of taxation is to create demand for a currency unconvincing. I find the argument that bond issuance is to control overnight interest rates incorrect – it is the trading of such that might make a difference but this could be achieved by the RBA offering interest on overnight deposits. Whilst our credit rating means little for the government, would it create problems if commercial banks had to seek funds from overseas? Until they can get to the nuts and bolts, it remains an esoteric conversation for me.

25. Kaye LeeOctober 3, 2018 at 8:49 pm

    As for Venezuela, their almost total reliance on oil for export earnings caused them problems when the oil price dropped. They didn’t have the export earnings to import everything else that they need (and don’t make) so scarcity caused prices to go up.

    Add to that the government’s willingness to print extra money and regularly hike the minimum wage in an effort to regain popularity with Venezuela’s poor, and you get money which loses its worth rapidly. On the most basic level, there are more people wanting to purchase goods than the number of goods available – hyperinflation.

    You are really wrong to say that MN refuses to try and understand about MMT. He too has spent a lot of time reading and asking questions. If the questions remain unanswered to his satisfaction, then perhaps the explanations weren’t sound enough?

26. paul walterOctober 3, 2018 at 8:59 pm

    Rank corruption. Aberration or par for the course is the next question.

    I know what I’d be guessing.

27. KronomexOctober 3, 2018 at 9:50 pm

    If this posts more than once then please remove the extras. Just realised that I stuffed up entering the email address. Time to call it quits for the night, my little eys are starting to hang out.

    Pastor Scummo must be just about orgasming in joy over his heros (and is no doubt jealous that he loves Kim Jong-Un and not him) latest sickening scumbaggery –

    https://www.newsweek.com/get-married-or-leave-country-donald-trump-stops-same-sex-visas-partners-1148574

    Trump is doing what Morriscum can only dream about at the moment. Personally, I feel that he and almost all the rest of the LNP don’t deserve to be named properly. The destruction and levels of corruption they have wrought and continue to inflict on this country leaves me to barely even consider them human.

28. Matters NotOctober 3, 2018 at 10:19 pm

    Always amazed at the logic employed by some MMT adherents. Citing from above:

    Your other examples will all have the same flaw

    Given that no other examples were provided, then how does one know they will have the same flaw? Possibly, because faith is the preferred epistemological position? Yes, MMT for many is just like a religion. One has to believe.

    Seems to me that (amateur) MMT proponents would do well to read articles that challenge the MMT construction of reality. I do. While I want MMT to be valid, I accept that the vast majority of economists think otherwise. Indeed they think it’s fundamentally flawed. And I want to know why.

    Foreign debt IS a problem. As Mosler argues:

    … that debt denominated in a foreign currency certainly is a fiscal risk to governments, since the indebted government cannot create foreign currency. In this case the only way the government can sustainably repay its foreign debt is to ensure that its currency is continually and highly demanded by foreigners over the period that it wishes to repay the debt – an exchange rate collapse would potentially multiply the debt many times over asymptotically, making it impossible to repay.

    One needs to look at constructions of reality from as many perspectives as possible. Unfortunately, for the religious adherents that’s sacrilegious.

    Debunking Modern Monetary Theory (MMT) & Understanding it First

    Note also that MMT, despite claims to the contrary, is yet to be adopted by any government. At least – publicly.

29. LOVOOctober 4, 2018 at 1:19 am

    Three tiers of Govt. exist, ….two tiers have to kinda work within the constraints of an ‘household budget ‘. ..(yeah/nah?)..one tier owns the printing press.(0’s and one’s etc )…. My question would be “Which Tier of Govt. is the most likely to go into Bankruptcy and close down “……mm.
    Would the first tier (Feds) go into bankruptcy and have to ‘foreclose’ and shutdown? …would a State gov. have to close it’s doors, shut up shop and get the #@$* out of here if it ran outta dosh?……would a Council have to say “Sorry Citizens- where broke please leave.. our community has closed” down?….. Wot eva the result of peoples thoughts on MMT, can anyone explain to me how any of the three can go broke and disappear ‘due’ to market force’s and a lack of equity, etc ??
    Or put it another way… businesses can go belly up, but the three tiers ‘can’t ‘. ..because Government’s (all three tiers) aint a business. … just sayin 😐

30. DiannaartOctober 4, 2018 at 7:09 am

    Matters Not

    I would like MMT to be a valid concept as well. And I share the same concerns as you and Kaye Lee.

    Watching the shenanigans of the LNP, particularly since Abbott onwards, I doubt such ideologically stuck conservatives could manage let alone implement MMT – they chronically mismanage the economy right now.

31. KronomexOctober 4, 2018 at 7:46 am

    Anyone else see the possibility of a few thick brown envelopes being slipped into the pockets of a certain party to make this go away?

    https://www.theguardian.com/business/2018/oct/03/glencore-seeks-injunction-against-tax-commissioner-to-prevent-use-of-paradise-papers

32. HarryOctober 4, 2018 at 11:20 am

    Matters Not: Japan comes the closest to running the nation along MMT lines.

    We live in an MMT world but most current neoliberal governments do not use their fiscal capacity. Japan has a debt/gdp ratio of over 200%, as result of deficit spending (adding money into the economy) but has low unemployment and inflation.

    BTW, MMT does NOT advocate unlimited spending without regard for its possible inflationary consequences. Actual availability of unused resources, ie all that is for sale in the economy is the real limit.

    Please read the attached links and point to errors in the logic:

    https://era-blog.com/2016/12/05/paying-for-public-services-in-a-monetary-sovereign-state/

33. Kaye LeeOctober 4, 2018 at 11:56 am

    My real problem with MMT is that it trusts politicians to spend the money productively. That is an impossible assumption.

34. DiannaartOctober 4, 2018 at 12:41 pm

    Right there with you, Kaye Lee.

    As with many idealistic solutions, MMT relies upon a high level of integrity.

35. Andreas BimbaOctober 4, 2018 at 1:37 pm

    It is not an indication of religous zealotry to accept the basic principles of MMT economics, nor is it zealotry to accept Newton’s laws or Einstein’s laws.

    All these theories stand up to challenge – they work!

    To believe the mainstream economists may be comforting especially as they are the majority but they are wrong just as the flat earthers, earth centred orbit believers and creationists were/are wrong.

    What is so hard to accept about adjusting federal government deficits so that the economy returns to a full employment condition? Most of the developed world followed such policies up to the mid 1970’s – progressive and conservative governments?

    The Chinese national government currently has a deficit of about 15% of GDP without issuing bonds or runaway inflation – ahhhh the next Zimbabwe! The US government had a deficit of 28% of GDP in 1942 yet inflation peaked at 12% before declining and the economy doubled in size during the wartime mobilisation.

    The MMT economists just recommend increasing the deficit until full employment is attained and a Job Guarantee is the most effective way of self regulating that deficit in a NON INFLATIONARY way. The deficit may peak at 4 or 5% or 6% under our current circumstances in Australia. The enlarged fiscal capacity for our federal government can be used to reduce our environmental footprint as well as for improving education, agedcare, healthcare, pensions, infrastructure funding support for state and local governments and many other worthy areas of government expenditure as well as a Job Guarantee if managed correctly.

    To deny the solution offered by the MMT economists is to deny ourselves the main solution and condemns us all to more of the same.

    As for the destructiveness of our financial sector I couldn’t agree more. For example our superannuation sector now charges fees of about $32 billion p.a. for BUGGER ALL and the banks receive a mortgage repayment windfall of at least an estimated $40 billion p.a. due to the property price asset bubble which they very effectively lobbied for. The insurance sector is also very well remunerated and one can add our lax tax laws and chronic levels of tax evasion. Crony capitalism on steroids.

    We lost our car manufacturing sector and 200,000 potential jobs for want of a $500 million p.a. subsidy (1/140th of the previously mentioned finance sector subsidies) that was all paid back in taxation of the applicable businesses and employees in any case. Alternatively a 15% tariff on car imports could have replaced the subsidy and provided additional spending capacity to the federal government but our current neoliberal free trade obsession now apparently makes this option unacceptable.

36. DiannaartOctober 4, 2018 at 2:20 pm

    Andreas Bimba

    You equate Einstein’s and Newton’s proven theories (proven with both physics and observation) with MMT?, which remains an abstract theory.

    Talk about the classic “appeal to higher authority”.

    Nonetheless, I remain open minded on MMT, in spite of your commentary, because I want there to be a better way.

    However, until proponents of MMT can engage with questions, such as how to implement MMT in a regulated and accountable way, no matter which stripe of government holds the reins of power, MMT does not hold up as proven.

    Questions are good, Andreas, they mean people are interested and not being dismissive. Therefore, an honest consideration of questions would be appreciated.

37. HarryOctober 4, 2018 at 3:28 pm

    Kaye Lee: “My real problem with MMT is that it trusts politicians to spend the money productively. That is an impossible assumption”.

    There is undoubtedly some truth in that and we might be seeing it now with the Coalition who with their backs against the wall are trying to win back voters by some of their promises.

    Its always an issue and because resources rather than money are always finite, there is a danger of over-committing resources and creating inflation. And governments cannot do everything they might want to do, at least not at the same time. The focus should always be a basic question? Does this spending advance public purpose, eg building a fair and sustainable Australia?

    And that is where politicians need to have access to sound economic advice, that has the goal of advancing public purpose front and centre. Surely that is the role of politicians? Why hand ball this responsibility to un-elected officials in Treasury or the Reserve Bank.

38. Andreas BimbaOctober 4, 2018 at 3:35 pm

    Diannaart and other doubters, MMT is really an amalgamation of the latest and greatest economic theories that mostly arose last century such as sectoral balances, that nations with their own fiat currency have unlimited currency issuance capacity, that increasing inflation only arises when aggregate demand exceeds the productive capacity of the economy, the most effective way of regulating aggregate demand for national governments is to regulate fiscal net spending, that all national government spending creates money and all national government taxation extinguishes money, that a properly designed Job Guarantee acts as a counter cyclical mechanism for full employment and price stability and is the optimal way to regulate fiscal net spending (the deficit).

    All parts have been proven by theory and practice in many nations at many times in history. MMT is not an abstract theory but is as valid as Newton’s laws.

    Which parts do you consider invalid?

39. HarryOctober 4, 2018 at 4:12 pm

    Matters Not:

    “… that debt denominated in a foreign currency certainly is a fiscal risk to governments, since the indebted government cannot create foreign currency. In this case the only way the government can sustainably repay its foreign debt is to ensure that its currency is continually and highly demanded by foreigners over the period that it wishes to repay the debt – an exchange rate collapse would potentially multiply the debt many times over asymptotically, making it impossible to repay”.

    Absolutely true but Warren Mosler and other MMT proponents such as Bill Mitchell and Steven Hail quite categorically warn against taking on debt denominated in a foreign currency is both extremely unwise but unnecessary as well.

    MYTH #4: What we don’t tax we have to borrow from the likes of China for our children to pay back.
    Reality: Paying our debt holders back consists of transferring funds between accounts.

    One constantly hears that the Chinese (and other external creditors) “fund” our deficit. The folklore is that when China finally sells off its US bond holdings, those yields will sky-rocket. The dollar will then crash, no one else will want the debt, and it will be the end of America as we know it.

    To debunk this myth, you need to know two things. First, all foreign governments have checking accounts at the Federal Reserve Bank called “reserve accounts.” Second, US Treasury securities are nothing more than savings accounts at the same Federal Reserve Bank.

    How does China get its dollars? It sells things to us. And when China gets paid, those dollars go into China’s checking account at the Federal Reserve Bank.

    And when China buys US Treasury securities, what happens? The Fed transfers China’s dollars in its checking account at the Fed to its savings account at the Fed. We call that “borrowing from China” and “going into debt to China.” But it’s not really “borrowing” in the sense of creating an external constraint whereby we have to defer spending to “pay back” China. The Fed simply pays off China’s “debt” by transferring the dollars, plus interest, back to the holder’s checking account, which it can create at the stroke of a keyboard as the monopoly issuer of dollars.

    The dollars are nothing more than data entry on the Fed’s computer. They have no other existence. And it has no impact on the government’s ability to spend as to whether China’s dollars are in their checking account or savings account.

    All we owe China is a bank statement that shows them where their dollars are. Sadly, they know this. But they also know that we think we are dependent on them, and take advantage of our error.

    ~Marshall Auerback, Senior Fellow at the Roosevelt Institute and Warren Mosler, President, Valance Co.”

    http://rooseveltinstitute.org/deficit-nine-myths-we-cant-afford/

40. DiannaartOctober 5, 2018 at 1:49 pm

    Andreas Bimba
    Which parts do you consider invalid?

    The parts where you don’t answer basic questions, such as why no other fiat nations have fully implemented MMT and what measures need to be in place to secure said theory against such very human behaviours as manipulation, corruption.

    Telling me the sky is green because you say so is not good enough, I need some discussion, not condescension, I will repeat myself (literally):

    Questions are good, Andreas, they mean people are interested and not being dismissive. Therefore, an honest consideration of questions would be appreciated.

    I remain open minded on MMT, in spite of your commentary, because I want there to be a better way.

41. Kaye LeeOctober 5, 2018 at 1:57 pm

    I also am uncomfortable with the idea that taxation destroys money. I accept that it withdraws it from circulation but it is credited to a government account at the RBA. I understand that the transaction is just keystrokes, but nevertheless, it is sitting in an account. I have been told that is an operating account rather than a transactional account but I do not think that is correct (not that I really understand what that means).

    I would be much more comfortable with saying taxation does not constrain spending.

42. Matters NotOctober 5, 2018 at 4:41 pm

    When I transfer money between my accounts, the chosen amount (let’s say $1 000.00) disappears (or is ‘destroyed’) in account A only to reappear in Account B. The amount ‘destroyed’ in one account is then ‘created’ in Account B. Isn’t that what happens when taxation is paid? It gets transferred around and there isn’t a person employed to ‘destroy’ the electronic monies paid.

    In my understanding, the key/stroke amount ‘destroyed’ is recorded and the amount (key/stroke) ‘created’ is also recorded and golly gosh the totals are exactly the same. Perhaps – just perhaps – the notion that monies collected are then destroyed might be a tad misleading?

    It seems that the electronic money ‘destroyed’ instantly begets a clone or its equivalent. Or have I got that wrong. (Please no more links to articles – because I know most of them by heart.)

    But thanks to those who provided the latest set with undoubted good intentions.

43. Matters NotOctober 5, 2018 at 5:01 pm

    Re:

    categorically warn against taking on debt denominated in a foreign currency

    Undoubtedly! But what happens when a nation really, really needs some currency to buy some bare essentials and the potential lending nation is not prepared to buy bonds denominated in a currency that’s on the rocks?

    Do they simply go without and risk revolution or do they borrow anyway? And let the future take care of itself? Surely a nation that keeps creating ‘dollars’ is going to lose credibility? And the locals will have less trust? What is the value of a currency that loses credibility? When the locals have no trust?

    (I was once in Minsk – Belarus – a decade or so ago when the leader decided to significantly devalue their Ruble. Panic on the streets. We changed accommodation rather quickly.)