Doug Pollitt: MMT’s Stephanie Kelton meets the grifter of imperial France, John Law

Doug Pollitt: MMT’s Stephanie Kelton meets the grifter of imperial France, John Law by Chris Powell for GATA

Dear Friend of GATA and Gold:

In his September letter for clients, Doug Pollitt of Pollitt & Co. in Toronto compares Modern Monetary Theory advocate Stephanie Kelton’s new book, “The Deficit Myth,” with a recent biography of a monetary theorist of three centuries ago, the infamous John Law, and concludes that the policies they pursued are essentially identical — infnite money.

Law’s policy brought down the government of imperial France in only four years in the 1700s. Kelton may not quite realize it, but the policy she advocates has been in force in the United States since long before she began writing about it. (Yes, the United States still issues debt instruments but debt that keeps growing rapidly, never can be repaid except in devalued currency, and is treated as money itself is no debt at all but the equivalent of new money, just as it was in Law’s time.)

Pollitt acknowledges that infinite money policy has had a much longer run in the United States — almost 50 years, figuring its duration from the termination of the dollar’s official convertibility to gold in 1971 — that it had in imperial France and that it might continue a lot longer even as the dollar devalues gradually instead of collapsing.

While only a high school graduate, your secretary/treasurer, by virtue of closely observing for 20 years the racket called the gold market, would add something else the MMT people don’t recognize and Pollitt doesn’t mention. That is, MMT, essentially infinite money, gains endurance from, and indeed requires, something the French regency of Law’s day lacked — an efficient mechanism of surreptitiously suppressing commodity prices and pushing infinite money creation into financial assets so the devaluation of the currency is more or less concealed from the masses.

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Chris Powell

The Gold Anti-Trust Action Committee was organized in the fall of 1998 to expose, oppose, and litigate against collusion to control the price and supply of gold and related financial instruments. The committee arose from essays by Bill Murphy, a financial commentator on the Internet (, and by Chris Powell, a newspaper editor in Connecticut. Murphy's essays reported evidence of collusion among financial institutions to suppress the price of gold. Powell, whose newspaper had been involved in antitrust litigation, replied with an essay proposing that gold mining and investor interests should act on Murphy's essays by bringing antitrust lawsuits against financial institutions involved in the collusion against gold. The response to these essays was so favorable that the committee was formed and formally incorporated in Delaware in January 1999. Murphy became chairman and Powell secretary and treasurer.