📚 Stock Market Glossary

Modern Monetary Theory (MMT) is an economic framework popularized by economists like Stephanie Kelton, challenging orthodox views on government deficits.

While orthodox economics treats a government budget like a household that must balance taxes with spending, MMT argues that monetarily sovereign governments that issue their own fiat currency cannot involuntarily go bankrupt because they can always create money to pay obligations.

• Government Deficit = Private Sector Surplus: National accounting dictates that every dollar of sovereign deficit spending creates an exact dollar of net financial wealth in the private sector.
• Inflation as the Sole Constraint: The operational limit on government spending is not debt sustainability, but the real resource capacity of the economy (labor and materials) triggering hyperinflation.
• Taxes as Inflation Dampeners: Taxes do not fund government spending; instead, they create demand for fiat currency and drain liquidity to suppress inflation.

Direct cash distributions during the pandemic functioned as a de facto MMT experiment, ultimately fueling high inflation. In regimes of fiscal dominance, allocate capital toward real assets (gold, energy infrastructure, pricing-power equities) to hedge against currency debasement.