Teddy Roosevelt is probably spinning at 10,000 RPM in his grave right now about to fly apart.
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The money supply (M1 - sort of) is the total $ in the private sector. Whether those $ are in Dubai, Ethiopia, Timbucktoo, or Brooklyn - doesn’t matter as far as the money supply.
Sure it does as the local economy will see the money velocity and if its all sitting overseas it doesnt contribute at all. so will look like no money added to the economy.
Norway does not have a fiat economy. There is not enough demand for the krone. All the points I have made on MMT ONLY apply to fiat economies - Basically, USA, Great Britain, and Australia - they are monopoly issuers of their currency with significant economies to generate demand for their currency
Firstly, from an MMT POV - as above, the US government does not need $1.00 of taxes to buy anything available in the market denominated in $. The roll of taxes is to manage the money supply to control inflation.
Second - again from a MMT POV - trade deficits are not necessarily bad, as $ can always be added to buy more goods. As above in some ways we are getting real good for $ we can make with a key stroke.
however - the real importance IMO of balance of trade are 2 fold - the first is what is really economic - where is the most efficient means of production being used. The second is domestic employment - if balance of trade is taking meaningful employment that can not be easily replaced that is an issue to be managed.
Thats the weirdest comment I have ever heard.
If the gov prints paper based on no intrinsic value its a fiat currency.
MMT was only an invented theory not very long ago to match reality that has been running since USD was removed from the gold standard
Norway is technically a Fiat economy. Meaning it can buy anything in the market denominated in NOK, the issue is there is just not enough good and services in the world denominated in NOK for it to matter all that much.
How long will it last?: