Magic Money Tree Economics

Miles Franklin sponsored this article by Gary Christenson. The opinions are his.

Our Current Financial Circumstances:

  1. The U.S. is $22 trillion in debt and burdened with $100 – $200 trillion more in unfunded liabilities. Just to pay the interest the U.S. must borrow. Debt is rapidly rising and cannot be paid unless “they” default or hyper-inflate the dollar.
  2. Chairman Jerome Powell stated, “The U.S. federal government is on an unsustainable path.” Even the Fed admits what everyone should realize.
  3. Global debt is $250 trillion. Some countries have descended farther down the debt-paved road to economic hell than the U.S.
  4. Pensions are under-funded, student debt is a disaster, the main street economy is weak, real estate prices and sales are falling, retail sales are down, real wages have been stagnant since the 1970s, and no credible plan exists to fix debt, deficits or devaluations.
  5. The political and financial elite profit from wars, inflation, devaluation, strip-mining assets, and income inequality.
  6. It’s an ugly picture with no easy answers. But debt, deficits and QE levitated stock markets to all-time highs.


Global central banks have created over $20 trillion in “funny money” to bail out commercial banks, purchase stocks and ETFs, buy sovereign bonds, levitate stock markets and force interest rates lower. They implemented the central bank version of magic money tree economics.

MMT—Modern Monetary Theory—supporters claim that “printing” dollars enables huge expenditures and makes excessive debt irrelevant.

MMT might be nonsense, but so are most of the current central bank policies and practices. If central banking and economic policies were sensible and effective, how did the United States (and world) sink into such a deep financial hole?


Indulging in fantasy accounting, delusional economics and speculation, we suggest…

  • Mortgage relief: The Treasury should issue vouchers that reduce mortgages (mostly government agency loans) on single-family homes by half. Individuals mail the vouchers to their lenders who cut their outstanding balance in half – non-taxable – and paid by the Treasury. Home owners will feel wealthier and less overwhelmed.
  • Student Debt: Current and former students are drowning in student loan debt. Use similar vouchers to reduce student loan debt by two-thirds. Debtors will mail the voucher to their loan administrator and receive a non-taxable debt reduction. Student loan payments decrease.
  • Credit Cards: Apply similar vouchers for credit card debt that reduces it by half, also non-taxable. People will spend more and boost the retail economy.
  • Income Taxes: Americans, like many others, pay too much in taxes and need more spendable income. The IRS should refund 100% of taxes paid by individuals for tax years 2016 and 2017. Most people will spend the refunds on consumer goods and stimulate the non-financial economy. Politicians will be heroes.
  • Universal Basic Income: Encourage Americans to apply for a UBI through the Social Security Administration. No social security number – no UBI! This UBI will put extra currency into circulation and stimulate the economy.
  • Dream On!

  1. These programs will offer needed debt relief to individuals. The Federal Reserve provided $ trillions to bail out banks in the past decade. However, the above debt relief programs will directly help individuals, which is fair considering the banker bailouts.
  2. Corporations and the wealthy received the Trump tax breaks. The government should now aid the bottom 90% of Americans.
  3. With less debt, individuals will spend more and increase savings, both of which will benefit the economy.
  4. Dollars are backed by nothing and have value only because we believe they have value. The banking cartel creates $trillions each year from “thin air.” The above MMT programs do for the individual what the banking cartel does for bankers.
  5. People will love these programs and politicians can promise something for nothing to buy votes.
  1. The programs aren’t fair. Some people benefit more than others, but our current system is also unfair. Nothing new here.
  2. Who pays for these programs? Nobody directly pays, the money is created (like now) but fed into the economy through individuals, not the banks. Helicopter money! We pay via inflation.
  3. It will increase consumer price inflation. Yes, but the current financial system is already inflationary, which someday will require a reset.
  4. The political and financial elite don’t receive a payoff from these programs. Correct—the programs must be tweaked to feed dollars into the hands of the elite, or they’ll block the programs. Bring on the lobbyists…
  5. People might realize that dollars are fake money when trillions are created from nothing and used to reduce individual debt. (However, facing the truth is good.)


For perspective on Washington D.C. and Wall Street, we listen to wisdom and wit from Bill Bonner:

“We look at the passing parade in Washington through a cynical lens…

No situation is so hopeless… so absurd… or so disastrous that the feds can’t make it worse. No policy is too stupid… too counterproductive… or too corrupt that it can’t become the law of the land.

And no man is too craven… too degenerate… or too much of an imbecile to be disqualified from public office.”

The public officials described above make the rules and will create more debt, larger deficits, and possibly use MMT. Are you prepared for the ugly consequences?



  • MMT or Modern Monetary Theory or Magic Money Tree economics is an excuse for free-spending politicians.
  • However, dire consequences will besiege us if we continue current central banking and debt policies. Which will be worse, current policies or MMT?
  • With or without MMT programs, the U.S. is spending itself into an economic disaster. Increasing consumer price inflation, continual devaluation, and exponentially increasing debt are the best-case scenarios.
  • Under those best-case scenarios, we should own silver, gold and hard assets to insure our savings, retirement, and purchasing power.
  • Under far worse scenarios, we must own silver and gold to protect ourselves from what our politicians, delusional programs, central bankers, and predatory government will do to increase their revenues.
  • Read: “Silver versus Debt, Delusions and Devaluation.”
  • Read Holter: “What Would You Sell Your Gold For?

Miles Franklin sells silver and gold. Call 1-800-822-8080 and tell them you agree with the Deviant Investor about silver, devaluations and delusional programs.

Hoping for a return to economic, financial and political sanity…

Gary Christenson

The Deviant Investor

8 thoughts on “Magic Money Tree Economics

  1. I once started the Free Gas for Everybody Party. I took the money the USG was going to spend on the ME wars and gave it to American consumers in the form of an energy subsidy. As the (imaginary) war got larger the subsidy increased. 6T is not a small amount, and it would have put cash in consumers pockets, while eliminating untold death and destruction. So you’ve got half of it, free medicare won’t really help, we need to stop destroying lives in the first place, by intervening at birth to see all children have a clean safe healthy environment.

  2. That’s perfectly fine. Except dissing MMT is not sensible. MMT uncovers the real tools of macroeconomics. It doesn’t set them up. However using them will make a difference to everybody’s welfare. Go on a voyage of discovery and see for yourself. Avoid the straw men,

  3. Within the first sentence this guy has shown he knows nothing about REAL economics.”100 – 200million in unfunded liabilities” There is no such thing as unfunded liabilities for a monetary sovereign government. Liabilities are paid down as the invoices arrive and the payments become liability free currency in the economy. This happens all the time and will happen in future Debt means spend now pay later but for the government it means pay now spend later. The $22 trillion in debt is investor savings stored in the fed as bonds. They SAY they fund the deficit but that is a lie, as the deficit paid the debts already as I said before and the Fed does not spend the money which gets recycled at maturity. That is just point 1!
    Point 2, Jerome Powell doesn’t deserve to be Fed Chair as he is too ignorant for the important role. At least Bernanke knew taxes do not fund federal spending,Not Powell. Dangerous to have an incompetent in that position, like Trump: pathetic and spineless. Point 3 Maybe so but probably wrong. Point 4 only private pension funds are at risk of insolvency, They cannot possibly survive. The fed will have to take them over. Points 5 and 6 no problem with them.

    There is no “magic money tree”. such a “tree” is not needed. It all comes from “Thin Air” created by FIAT.[“let it be”] Keep in mind that MMT DESCRIBES THE EXISTING WORKINGS OF THE ECONOMY. IT IS NOT AN HYPOTHESIS. It just clears the air of all the fakery that passes for macroeconomics. Such as the “Household analogy” That is when the government says money is scarce and there is only so much to go around. Therefore “we have to cut welfare and charge FICA for education and have private healthcare, all so the top tier of parasites can have tax breaks.” totally Evil. MMT just points out these facts as discoveries unveiled after decades of misinformation and lies. If the author wants to stay joined to them at the hip he needs to not learn anything.
    Some of his comments are not MMT. Some are just plain book keeping and accounting and some are from other theories, Steve Keen supports the Debt Jubilee idea mentioned here and it may well be a future event when SHTF moment comes.
    MMT is no excuse for free spending politicians. The spending is the only way the government can create the money supply. And don’t forget MMT is about the government. We still have the commercial banks creating credit at whatever rate they can make profitable. Are you lumping them in with free spending pollies? It is never helicopter money it pays for debts one on one.
    The freedom that MMT brings is the improvement in welfare for the poor, a Job Guarantee for those looking for work, free healthcare [big savings] and free education at least K-16. None of these will drive up inflation, because the money will be spent into the economy instead of going to the banks and wealthy parasites. Spending into the economy will raise GDP and the economy will grow to keep pace with the money supply. No argument there.

    There is a limit. Inflation will become an issue only after there is full employment and all available resources are utilised, not before. MMT reminds us of it it doesn’t cause it. Thats for the politicians.

      • Bad luck! It’s all true. I suggest you treat MMT as a voyage of discovery. As you progress [ps read the original thinkers, not second hand faux experts] you will see that MMT uncovers the lies we are all assailed with every day by Classical economists who are profoundly misinformed about the real workings of the nation. The USA Federal government is NOT like a household, with limited finance . That is just one instance. They we discover the Federal Taxation does Not provide even 1cent of revenue. All the currency comes from deficit spending and/or bank credit approvals for mortgages etc. There’s more But you can find it

    • What a crock. MMT sounds good to the ignorant because there is no real accountability. You can get drunk with no hangover. Debt, at least, feigns accountability. What needs to happen [& will] is a reset.

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