Here’s the document:

Exchange rate policy and full employment

http://moslereconomics.com/2010/10/04/exchange-rate-policy-and-full-employment/

you can get one time adjustments via the cost side, which is a different matter.

and with mmt recognizing imports as real benefits and exports real costs, and no solvency issue, etc.
most of the mainstream currency arguments are moot

see ‘exchange rate policy and full employment?’

in general, deficits are like a bumper crop, and surpluses a crop failure, etc.

Rising prices are not an inflation in the economic sense. Rising prices are a reduction in the standard of living.

Inflation is one of those irritating words like savings that is very Humpty Dumpty like – tons of definitions depending upon the particular prejudices of the writer.

“but if we are running fiscal deficits to get full employment and these deficits lead to a devaluation in the forex market”

The US is running colossal deficits right now and the value of the dollar is going up.

So is the UK and our exchange rate is relative stable and increasing against the Euro.

So this idea that increased money supply = decreased exchange rate is another neo-classical myth designed to frighten people away from changing the status quo. The reality is much more complex than that.

Remember that all MMT does is maintain the strength of the financial flows through the monetary circuit at somewhere near the maximum values the system can withstand. That is positive for real output and means the economy is more valuable, not less.

but if we are running fiscal deficits to get full employment and these deficits lead to a devaluation in the forex market, then we could have inflation and according to mmt we should raise taxes or cut spending in order to curb inflation
and that prevent us to get full employment
so IF fiscal deficits lead to devaluation of the currency then we cannot get full employment and price stability
where am i wrong?

The exchange rate just floats and is determined by supply and demand.

That is what helps give you the degree of freedom required to stabilise prices and stabilise employment.

If you also want to stabilise the exchange rate, then you have to pick which of prices, employment or private debt you want to move – as the Eurozone members have found out to their cost.

MMT concerns itself with the purchasing power of the dollar. The value of the dollar against other currencies is merely a component of this. There is no need to worry about a particular dollar fx rate any more than one should worry about the price of any particular commodity in dollars.

That being said, there has been no more bullish sign for a country’s currency than the start of a policy of higher fiscal deficits combined with higher interest rates. George Soros’ protege Stanley Druckenmiller mentioned this in The New Market Wizards I believe.

if MMT tells us we should not worry about fiscal deficits
MMT must have some ideas of the consequences of fiscal deficits on the forex market
i mean how can we let the deficit float freely if this has consequences on the forex market? how can we just not worry about it?
i don’t think we can pass over this issue stating that the effects are unclear…