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Modern Monetary Theory (MMT). It is usually derided by its detractors as saying that the government can print all the money it wants. Its supporters say that it is a revolutionary way to think about the economy.
2020 has brought MMT to the attention of many because governments have embarked on large stimulus programs, without increasing taxation and largely funded by central bank QE programs. As Howard Marks best summed it up in his latest memo:
"Normally one would expect such a flood of additional liquidity into the economy to cause inflation to accelerate ... On the other hand, we’ve had substantial deficits and accommodative monetary policy ever since 2008 and no serious inflation. We’ve seen a 50-year-low in the unemployment rate and yet not the inflation the Phillips Curve would have predicted. And Japan and Europe have been trying for 2% inflation for years without success. Is inflation a threat anytime soon? The answer’s clear: who knows?"
Clearly even the best minds don't know the answers. But I found Kelton did an extremely good job defining and arguing for MMT. I wouldn't goes as far to insist (as she does) that it is a reframing on the order of Copernicus, but there are certain interesting ways of framing things that she argues for.
Some points worth:
* What exactly do proponents of MMT define it as?
* Do deficits matter?
* Are we about to see a surge of inflation as some, such as Summers, argue?
* What are the short comings of MMT that you see?
* Should we move to a MMT system, and reject the surplus-deficit illusion we currently operate under?
* Other points of interest you may want to bring up.
Another year and another Berkshire Annual Letter. This year the Berkshire Hathaway annual meeting will again be held online die to Covid. For those who haven't been, it is a great experience to meet like minded individuals as well as listen to the musings of two of the world's most knowledgeable individuals. But who's to say we can't have a similar discussion here in HK.
There is no defined book for this event, rather I would like to hear your thoughts on Berkshire, and good stories you have about Buffett or Munger, maybe even your thoughts on value investing - it definitely has been an interesting time indeed.
Some recommendations of what I have enjoyed:
* Berkshire's Annual Letters - this years one raises some interesting points.
* Biographies of Buffett: Snowball by Schroeder, Buffett by Lowenstein
* Biographies of Munger: Charlie Munger by Griffin, Damn Right! by Lowe
* The Intelligent Investor, Securities Analysis by Graham
* Poor Charlie's Almanac by Kaufman
But I am also interested to hear any of your recommendations.
From the acclaimed author and historian Walter Isaacson, who wrote the fantastic Steve Jobs and Da Vinci biographies, comes The Innovators which is a history of the computer and the internet.
It is a well written, balanced account often giving both sides of the story, but at the end of the day Isaacson does give his own personal view, as well as insights from his own experience. I found the book a rewarding read in that contrary to the lone-wold, tech bro myth which is often perpetuated in the media (one only needs to think to any time there is a tech IPO), Isaacson emphasises the often unappreciated role of women, collaboration and the government in driving innovation. In particular, this offers many lessons for the innovation that surely must come as we attempt to tackle the massive problems in our current world.
Interesting points of discussion:
* Why has the role of women in the digital era not been given its due attention?
* Why has society embraced the "tech bro" stereotype, despite the fact that these people have depended on the work and insight of others?
* Why is the government often viewed as a force that retards innovation?
* Is innovation foreseeable or is it driven in large parts by exogenous events?
* Have computers and the internet always embraced the best path? Or has development sometimes taken a turn for the worse, the consequences of which are still felt today?
* Any others points that you found interesting!