Peter Stella, Former Head of the IMF Central Banking Division, joins Joseph Wang, former senior trader for the New York Fed and author at Fedguy.com, and Jack Farley for a wide-ranging discussion on:

-what really causes inflation 

-monetarism, fiscal theory of the price level, and modern monetary theory (MMT)

-the unrealized losses on the Fed’s balance sheet

-why yield curve control likely won’t be necessary (or so Peter argues)

-the longer the duration of a governments’ debt, the less inflation is required to inflate it away

-when a central bank incurs unrealized losses, who “wins” and who “loses”? 

Filmed on March 29, 2023.

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Follow Joseph Wang on Twitter https://twitter.com/FedGuy12

Joseph Wang’s writings: https://fedguy.com/

Joseph’s latest piece, “Ameridollars”: https://fedguy.com/ameridollars/

Peter Stella on Twitter: https://twitter.com/Stellar_Consult

Peter Stella’s work: https://www.centralbankarchaeology.com/

“Do Central Banks Need Capital?” by Peter Stella: 

https://www.imf.org/en/Publications/WP/Issues/2016/12/30/Do-Central-Banks-Need-Capital-2260

Follow Jack Farley on Twitter https://twitter.com/JackFarley96

Follow Forward Guidance on Twitter https://twitter.com/ForwardGuidance

Follow Blockworks on Twitter https://twitter.com/Blockworks_

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https://blockworks.co/event/permissionless-2023

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Timestamps:

(00:00) Intro

(00:15) Peter Stella's Background At The International Monetary Fund (IMF)

(03:55) Joseph Wang On The Flaws Of Monetarism

(05:52) Milton Friedman: It's The Government That Prints Money

(07:56) The Fiscal Theory Of The Price Level

(13:38) Modern Monetary Theory (MMT)

(24:12) Real Value Of U.S. Debt Is Lower Now Than March 2020

(37:33) Permissionless

(38:38) The Fed Has Huge Unrealized Losses On Its Balance Sheet

(45:29) Details About The Fed's Mortgage-Backed Securities (MBS) Purchases In 2020

(51:51) Did The Fed Help Wealthy Homeowners Refinance Their Mortgages In 2020?

(54:21) Blockworks Research Plug

(55:22) When The Federal Reserve Has Unrealied Losses On Its Balance Sheets, Who Loses and Who Gains?

(01:13:50) Joseph Wang's Summary Of This Conversation

(01:15:08) Yield Curve Control and Potential Debt Death Spiral

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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.