[DetroitDan]

David Stockman does not seem to understand how fiat money works. Thus, he is “astounded that the yield on the 10-year JGB dipped to an all-time low of 0.31% in recent trading”. Japan is just proving that a government doesn’t need to sell bonds to raise money in its own currency, something Stockman can’t seem to wrap his head around. Japan will never have trouble paying back its bonds, as it can and does create money out of thin air to do this. That’s why the bond rates are so low, as people know this.

Mr. Ilargi, I humbly suggest you go beyond Steve Keen, whom I like, to read some Randall Wray or others with regard to Modern Monetary Theory (MMT). I used to read Mish, before I found MMT which explained a lot of the stuff that I never understood reading Mish (and others like Stockman), such as why Japan’s interest rates are so low.

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