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Yuzo Kano, founder and CEO of leading Japan-based exchange Bitflyer, says that Modern Monetary Theory (MMT) could lead to all kinds of economic and societal ills, including runaway inflation and loss of faith in money. The former Goldman Sachs trader noted on X that “inflation may never stop” should MMT be implemented more and more — a big problem for already struggling Japan.
While American doom scrollers talk incessantly about Trump and Harris, and others — more understandably in a sense — mourn a murdered squirrel named Peanut, Yuzo Kano is warning about the danger of implementing Modern Monetary Theory (MMT) in Japan.
The Goldman Sachs alumnus and CEO of leading crypto exchange Bitflyer says that practicing MMT could lead to loss of faith in money, runway inflation, and general economic chaos — something the embattled economy of Japan could really do without right now.
The Japanese Yen
Kano warns of MMT fallout
Kano took to Twitter on Nov. 3 (JST) to write (translated by Google): “The idea behind MMT is to ‘use a lot of money to improve the economy,’ but if this doesn’t work, there is a risk that prices will skyrocket and money will lose credibility.”
In his post, the Bitflyer founder notes that simply spending more and more (read: printing and creation from thin air) of the country’s fiat currency to fight problems could result in economic disaster.
At a time when even Japanese are jumping on the “Trump train,” under the delusion the Republican candidate is fiscally conservative, Kano’s post strikes a nerve.
Americans will remember (or have selective amnesia about) the time when Trump said the U.S. government can never default on debts, back in 2016. “First of all, you never have to default because you print the money, I hate to tell you, OK?” the former U.S. president smugly stated when pressed on fiscal issues.
This free printing is actually one of the key tenets of MMT — just inject more money whenever there’s a problem.
Japan’s new prime minister flip-flops, leans toward MMT
In the land of the rising sun, a new prime minister has also waffled on fiscal policy, going from being a critic of the BoJ (Bank of Japan) to encouraging free spending to boost the economy.
Elected on September 27, Shigeru Ishiba is interested in increased spending to beef up Japan’s military and is in favor of an “accommodative” monetary policy.
“With MMT, there is no longer a ‘let’s hold back because we don’t have enough money’ stopper, so politicians may be more likely to waste money,” Kano emphasizes in his post. “There is a risk that wasteful spending to gain popularity in elections will increase and things will not go well.”
Japanese Trump supporters wheel their MMT god through the streets at a recent rally in Japan.
Kano also hints at a basic fact of reality: if there is too much money and not enough goods, things are bought up out of proportion, and prices skyrocket.
For those just scraping by on a pittance in Japanese yen currently (read: most of the population), due in part to a USD on steroids, over-tourism, and rampant inflation, Modern Monetary Theory and more pipe dreams from politicians are the last things needed.
“Inflation may never stop,” Kano cautions, reiterating: “MMT believes that it is okay to spend a lot of money as long as the prices of things (inflation) do not rise too much.” But he warns that if they do rise sharply, the state cannot simply turn off the tap once the market has been flooded with fiat, and “inflation may get out of control.”
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