#162 Warren Mosler: Anatomy Of A Bank Run
The MMT Podcast with Patricia Pino & Christian Reilly
Banks Create Quote Unquote Money
Banks create quote unquote money, how can they run out of it? Right. Why can't they just build themselves out? Yeah. There's no way for that to happen unless both of those banks have an account at a third bank, in this case called the Bank of England. So we have this bank, SBB is out of us, still a good value bank. The positors who had $43 billion in their accounts at that bank, no problem, want to shift those dollars to another bank. And the other banks, well, when those dollars back to SBB, so the Fed won't lend them $43 billion. They can't find new deposits to replace
Patricia and Christian talk to MMT founder Warren Mosler about the recent collapse of Silicon Valley Bank and more.
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Order the Gower Initiative’s “Modern Monetary Theory - Key Insights, Leading Thinkers” (2023): https://www.e-elgar.com/shop/gbp/modern-monetary-theory-9781802208085.html
Free tickets for the launch of “Modern Monetary Theory - Key Insights, Leading Thinkers”, in London on 20th April: https://gimms.org.uk/event/book-launch/
For an intro to MMT:
Our first three episodes: https://www.patreon.com/posts/41742417
Episode 126 - Dirk Ehnts: How Banks Create Money: https://www.patreon.com/posts/62603318
All our episodes in chronological order: https://www.patreon.com/posts/43111643
All our episodes with Warren Mosler: https://www.patreon.com/posts/42918786
Warren Mosler on Twitter: https://twitter.com/wbmosler
Warren Mosler’s website: https://moslereconomics.com/
For a short, non-technical, free ebook explaining MMT, download Warren Mosler’s “7 Deadly Innocent Frauds Of Economic Policy” here: http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf
Relevant to this episode:
Warren Mosler’s proposals for the Treasury, the Federal Reserve, the FDIC, and the Banking System: https://neweconomicperspectives.org/2010/02/warren-moslers-proposals-for-treasury.html
For more on endogenous money (ie commercial bank loans create deposits, not the other way around): Episode 43 - Sam Levey: Understanding Endogenous Money: https://www.patreon.com/posts/35073683
Episode 126 - Dirk Ehnts: How Banks Create Money: https://www.patreon.com/posts/62603318
Episode 144 - Warren Mosler explains why the natural rate of interest is zero: https://www.patreon.com/posts/71966513
Episode 123 - Warren Mosler explains the source of the price level and implications for inflation using the MMT lens: https://www.patreon.com/posts/59856379
Quick MMT reads:
Warren’s Mosler’s MMT white paper: http://moslereconomics.com/mmt-white-paper/
Steven Hail’s quick MMT explainer: https://theconversation.com/explainer-what-is-modern-monetary-theory-72095
On government debt: “Some Numbers Are Big. Let Me Help You Get Over It”: https://christreilly.com/2020/02/17/some-numbers-are-big-let-me-help-you-get-over-it/
Episodes on monetary operations:
Episode 20 - Warren Mosler: The MMT Money Story (part 1): https://www.patreon.com/posts/28004824
Episode 126 - Dirk Ehnts: How Banks Create Money: https://www.patreon.com/posts/62603318
Episode 13 - Steven Hail: Everything You Always Wanted To Know About Banking, But Were Afraid To Ask: https://www.patreon.com/posts/41790887
Episode 43 - Sam Levey: Understanding Endogenous Money: https://www.patreon.com/posts/35073683
Episode 84 - Andrew Berkeley, Richard Tye & Neil Wilson: An Accounting Model Of The UK Exchequer (Part 1): https://www.patreon.com/posts/46352183
Episode 86 - Andrew Berkeley, Richard Tye & Neil Wilson: An Accounting Model Of The UK Exchequer (Part 2): https://www.patreon.com/posts/46865929
Episodes on inflation:
Episode 7: Steven Hail: Inflation, Price Shocks and Other Misunderstandings: https://www.patreon.com/posts/41780508
Episode 65 - Phil Armstrong: Understanding Inflation: https://www.patreon.com/posts/40672678
Episode 104 - John T Harvey: Inflation, Stagflation & Healing The Nation: https://www.patreon.com/posts/52207835
Episode 123 - Warren Mosler: Understanding The Price Level And Inflation: https://www.patreon.com/posts/59856379
Episode 128 - L. Randall Wray & Yeva Nersisyan: What’s Causing Accelerating Inflation? Pandemic Or Policy Response?: https://www.patreon.com/posts/63776558
More on government bonds (and “vigilantes”):
Episode 30 - Steven Hail: Understanding Government Bonds (Part 1):https://www.patreon.com/posts/29621245
Episode 31 - Steven Hail: Understanding Government Bonds (Part 2): https://www.patreon.com/posts/29829500
Episode 143 - Paul Sheard: What Is Quantitative Easing?: https://www.patreon.com/posts/71589989?pr=true
Episode 147 - Dirk Ehnts: Do Markets Control Our Politics?: https://www.patreon.com/posts/episode-147-dirk-72906421
Episode 144 - Warren Mosler: The Natural Rate Of Interest Is Zero: https://www.patreon.com/posts/71966513
Episode 145 - John T Harvey: What Determines Currency Prices?: https://www.patreon.com/posts/72283811?pr=true
Job Guarantee episodes:
Episode 4 - Fadhel Kaboub: What is the Job Guarantee?: https://www.patreon.com/posts/41742701
Episode 47 - Pavlina Tcherneva: Building Resilience - The Case For A Job Guarantee: https://www.patreon.com/posts/36034543
Episode 148 - Pavlina Tcherneva: Why The Job Guarantee Is Core To Modern Monetary Theory: https://www.patreon.com/posts/episode-148-why-73211346
Quick read: Pavlina Tcherneva’s Job Guarantee FAQ page: https://pavlina-tcherneva.net/job-guarantee-faq/
MMT Events And Courses In 2023
Tickets to the very first Scotonomics festival (online or in-person, Dundee, Scotland 24th-26th March) are available here: https://scotonomics.scot/live-events/
More information about Professor Mitchell’s MMTed project (free public online courses in MMT) here: http://www.mmted.org/
Apply for Dr Dirk Ehnts’ Modern Monetary Theory and European Macroeconomics course at Maastricht University (July 31st - August 4th) here: https://maastricht.dreamapply.com/courses/course/183-modern-monetary-theory-and-european-macroeconomics
Details of Modern Money Lab’s online graduate and postgraduate courses in MMT are here: https://modernmoneylab.org.au/
MMT Academic Resources compiled by The Gower Initiative for Modern Money Studies: https://www.zotero.org/groups/2251544/mmt_academic_resources_-_compiled_by_the_gower_initiative_for_modern_money_studies
MMT scholarship compiled by New Economic Perspectives: http://neweconomicperspectives.org/mmt-scholarship
A list of MMT-informed campaigns and organisations worldwide: https://www.patreon.com/posts/47900757
We are working towards full transcripts, but in the meantime, closed captions for all episodes are available on our YouTube channel: https://www.youtube.com/channel/UCEp_nGVTuMfBun2wiG-c0Ew/videos
Show notes: https://www.patreon.com/posts/80157783?pr=true
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