I'd argue that wage growth is only inflationary if productivity growth isn't keeping pace with it. Increases in aggregate demand aren't inflationary if prices aren't going up. Sure, consumers can draw down savings or borrow to spend and pull that consumption forward, but again, I'd argue that this is not necessarily inflationary. Eventually producers start passing on labor costs through prices, but as Sri mentioned, the pricing power needs to be there. There are some interesting discussions on this in the FOMC transcripts in the late 90's.

Very good interview. It's amazing how many economists directly or implicitly sight demographic issues as the primary issue regarding their battle against disinflation. What few seem to acknowledge, observed in this interview, is that massive asset inflation for those who are "labor rich and asset poor" leads those impacted to rationally opt to have fewer kids, etc. As always, it seems economists are attempting to address issues they are complicit in creating, and with no recognition that they or their predecessors' policies created the issues in the first place. The solution, not painless, is allow assets to deflate.

So, why substituting services for hard goods not stimulate inflation? One household can buy only one dishwasher over a decade, for example. But an ageing couple could, theoretically, purchase healthcare services of a value far exceeding that.

so MMT is what Italy has been doing since 1982 pretty much....

BIS put a paper out last year saying decreasing demographics are inflationary not deflationary as people think. I’ve been an MMT advocate since 2016 after reading Randall Wrays MMT primer. You can follow Mike Norman too. He’s been an MMT trader for about 20 years. Follow the US daily treasury statements to see Govt spending in action. Current fiscal spending is highest ever which means huge amounts of money being created. As long as their is productive capacity in the economy then inflation will be tamed. Read Wray, Mosler, Mitchell or Kelton for MMT enlightenment 👍

Is it possible to get Mosler and Green together and talk through this topic again. It would help tremendously to have them articulate a response to the others view on on certain aspects of MMT. Thanks Monty

Absolutely brilliant conversation! Thank you gentleman. A question, if I may: My parents-in-law are in their 80s and they definitely skew their purchases to services. However, both comment that because of low interest rates they are not able to afford to buy new goods because they need to preserve their capital in order to cover their basic living expenses. Their desire for goods has actually not decreased - they would remodel their home and replace goods in a heart beat if they were earning enough on their savings. It's their fear of running out of savings before they die that skews their spending away from goods. They are a modern, healthy and outgoing couple. Many of their friends are in the same position. Add to that the fact that if they sell their homes to downsize, they are penalised through taxation. Conversely, my 4 step-children who are all young adults complain that their savings are not earning enough interest for them to catch up on inflated asset prices. They are holding off on purchases in the hope that asset values decrease, and instead spend their excess earnings on travel and services. They have opted out of starting families not by choice but out of necessity. Could it be that no one has the stomach to tolerate the pain necessary to correct the imbalances in the system because perhaps they are overestimating the pain and how long it would take for rebalancing to take place? I wonder what assumptions are being made that might be limiting the thinking on the issues?

This was great! Mike is a brilliant guy! Is there anything about the markets he doesn't know? Sickening, really. It would be a treat to watch Mike Green and Peter Thiel talk. Raoul/Mike, pls make it happen. Also, a 2nd installment of Mike Green and Chris Cole talking all things volatility.

Fantastic. I think I'll need to watch this again to let some of the more subtle points sink in.

An incredible interview. Both guests were incredibly knowledgeable and could explain succinctly very complicated concepts. This interview is one of the best I have seen on this platform. I feel honored to have been able to hear this conversation.

This was excellent. Mike is top notch. Sri is incredible.

Excellent. Takes an interviewer of Mike's caliber to facilitate worthwhile dialog with an intellect like Sri. Well done.

phenomenal interview

Excellent. Covered a lot of ground very quickly (for me). Going to have to re-watch at least once or twice to get the whole picture.

Wonderful interview. I would appreciate it if Michael Green would allow his guest speakers to, well, speak more. I felt this for a while, and this interview confirmed it. Mr. Thiruvadanthai is saying "right" way more than he should as a guest speaker. He is not there to confirm Mr. Green's viewpoints or knowledge, but rather to give his own insights. Also, the video ends with Mr. Green giving the last comments. Who is the guest speaker here?

Someone needs to interview Mike Green, rather than him being the interviewer

I think Trump and Fed have an agreement. 1. Trump gets his Wall (why he is obsessed with it) 2. Controls immigration 3. Wages rise 4. Inflation 5. Fed allowed/required to Raise rates

That was awesome! I requested under a previous video for a discussion on the investment implications of MMT and this was a wonderful start to that...

As usual a great interview - really enjoy Michael Greens interview style and the intelligent questions he puts to the interviewees - more please

Mike asks "How do you escape the balance sheet expansion situation" several times. Starting around minute 17. The answer (in the form of a non-answer was the same every time "balance sheets continue to expand" presumably until an unspecified bad event happens. Ouch. Timing is the only unresolved issue as a recurring theme across many real vision interviews. It will take a long long time to run through the wealth of the US.

Don’t comment ever but a big thumb up for this piece. Extremely educational as well as objective! Truly outstanding content. One of the best on RV.

Whew - I'm going to have to watch this one a couple times - at 1x speed. I'd like to think I understand economics to a fair degree but there was so much subtext I'm sure I missed plenty. Can't get this anywhere else but RealVision. Beats the hell out of CNBUYBUYBUY. Measured against this interview it shows what junk is out there for financial media.

It requires watching multiple Mike Green interviews to understand the sheer magnitude of how much knowledge is inside Mike Green’s head.

Mike I do not understand why CPI as defined today is in any way a good measure of inflation? Seems like the key parameter that is not well defined

Excellent - Levy approach explained super clearly & excellent interviewer

Excellent interview as expected. The Fed does drive the financial markets. IMO the Fed can destroy an economy but cannot really save a high-debt economy. Great discussion on macro issues, but I believe the world economies are too complex for a coherent picture and creditable policy options. I am all in favor of these complex analyses, but we need more. This leaves me with trying options with feedback loops to help course corrections. I am sure we will print more money. I would like these funds over the next ten years go into infrastructure that is sorely needed in the US. This follows Mr. Koo’s strategy for reducing corporate and private debt. Infrastructure will also help a lot of unemployed laborers to rejoin the labor force – helping household incomes. When money gets into the hands of the less well off, they spend it. The internet and robots will help keep inflation down. DLS

Great conversation!

"Capitalism is about [making] stuff" but seniors are demanding services. In aging economies that impedes wealth creation. Brilliant & succinct -- just the sort of "stuff" I hoped I was buying with my subscription to RV.

Excellent interview. Much kudos.

Almost didn't watch this. Glad I took the time. Excellent discussion on where we are in the current environment and possible solutions, Michael Green is very good as an interviewer

Wow! I follow these extremely smart guys on Twitter. I really wanted to watch them on RV! THANK YOU!

Stunningly good. Thank you Michael and Srinivas.. Looking forward to the encore.

The term “negativ growth” says a lot about the subject, there will be growth, nothing else but growth, everything else is heresy.

Please poet Michael’s Twitter handle. Thanks

what about the supply side of inflation and the cost of money if the bond market turns over like in the 70s? Everyone always focuses on the demand side....

I Enjoy this kind of discussion (and Michael your a deep intellectual) but gents your base is not “blocking and tackling “ . Your thinking is not aimed at the political system, save a brief mention of China . The US has created a middle class of serfs. Liberty is virtually gone❗️A challenge: in five mins name 3 things you can do without govt permission,licenses, or that is not regulated? The CPI is 3.12% a year since 1913. Inflation is a function of who gets the money. Since QE -only investors get the money ,who invest it not spend it in general ,thereby low inflation. The republic is lost. Prepare for the worst. Sadly ‼️

Why is Mike Green so good ?

Great interview! Funny how in the end, the only conclusion from two incredible intellectuals is that nobody has any clue what is going to happen next, inflation, deflation, etc. :D Nobody has any clue what is happening in the world. All you can do is buy low, sell high, and try to hang on!

Very interesting discussion by both parties. Thank you. However, I have a theory.... As humans perceive that they become 'smarter' we seem to have become bored. So we try to devise ways to 'Solve Problems' by COMPLICATING life. Even where there is no problem, our need to solve things using the mind, which is also the ego, becomes greater. Just like the way the Financial System has become more and more sophisticated by very smart people this sophistication is not helping the system at all, it is actually making more problems. So these smart people have to devise more ways to 'solve' a problem that was never there, or at least was not as large as it is now. We see this with sporting bodies constantly changing the rules, using technology to complicate the game. It seems we must keep inventing sophisticated financial products to hide the fact that we are greedy. If we just simplify things instead of complicating them the human race will be far better off :-)

As cliche as this may sound, I have seen hundreds of RV interviews and this is right up there with THE BEST OF THE BEST. I strongly second the assertion put forward by others - Mike Green is SUPER smart and my brain has to really work hard to keep up with him. Unbelievable brain training. Lol. Fantastic job by Sri as well - don’t want to take anything away from his great and key discussion points / responses here. But Mike Green - holy cow!!

Great interview. Mike Green is amazing. Is there anything the guy doesn't know? We need someone to interview him again. Been too long

This was one of the key point in the thesis of Balance-sheet recession by Richard Koo (Also an excellent interview by Grant Williams). who runs the balance sheet and why the order matters. excellent interview.

Absolutely outstanding.

Seriously, Mike Green has become the best interviewer on Real Vision. Give this guy a stake in the business! Good god!!

Great interviewer.

Blimey, I go from the Josh Wolf conversation straight to this and my mind is well and truly boggled. Sri's exceptional clarity and rigour combined with Michael's equal ability to forensicaly sort the wheat from the chaff allows - me at least! - to appreciate stuff way above my pay grade and thereby inform my own understanding of the things that drive our world economies.

Two of the best.

Mike green is so smart and awesome