We are living under Modern Monetary Theory (MMT) without daring to say its nam

From a long-term patrimonial or family perspective, the most rational bet remains real assets.

The needs of governments: have they discovered the financial perpetual motion machine?

Governments around the world are issuing sovereign debt at a record pace.

According to OECD projections, net issuance in 2026 is expected to approach $4 trillion.This level is close to—or even exceeds—that observed in the first half of 2020, at the height of the COVID crisis, even though no major recession, financial crisis, or global health emergency currently justifies such a borrowing frenzy.

This is not an accident.It is the direct result of the structural needs of modern states. The drivers are inexorable; public spending is caught in a self-reinforcing mechanism.Spending is exploding under the pressure of several powerful and, above all, enduring forces:

• High energy costs and the forced ecological transition;
• Increased defence budgets amid wars and geopolitical tensions;
• Financing of AI militarisation;
• Reconstruction of reshored manufacturing supply chains;
• Interest payments on debt that are becoming self-sustaining;
• Social protection in ageing societies.

These needs are not cyclical. They are systemic.

Faced with them, states have chosen the path of permanent debt rather than painful adjustment. Public policy is no longer focused on discipline; on the contrary, it is centred on finding ways to borrow even more.We have, in practice, entered an MMT regime without admitting it.The central reality, often hidden behind official language, is that we are already practising Modern Monetary Theory (MMT) without daring to utter its name.In this de facto regime:

• The state first spends according to its political and social needs.
• It then issues the debt required to finance that spending.
• Central banks (the Fed, ECB, BoJ, etc.) act as lenders of last resort and validate this monetary creation by keeping rates low, through yield curve control, or by intervening in markets (bond purchases, QE, or implicit forward guidance).
• Global money supply continues to expand (around 5-6% annually, with higher peaks), thereby validating the initial monetary creation.

It is an almost closed but entirely vicious circle: debt finances spending, which justifies more debt, which creates the means to finance yet more spending.Never forget: in our systems, debt is money. The production of debt creates collateral, and that collateral contributes to the production of global liquidity.

All the major central banks are complicit; they act like hedge funds.As long as confidence in the dominant currency persists, the system keeps turning.

Governments have discovered that a sovereign state issuing its own currency—or exercising broad control over its creation—cannot go bankrupt in the classic technical sense. It can always “monetise” its obligations.We are therefore living in a de facto MMT regime, even if authorities and most economists continue to use the traditional vocabulary of “debt sustainability” and “budgetary constraints” to preserve appearances.

One of the system’s secrets is to exploit uneven development—specifically, the different speeds at which social groups become aware of events and situations. It is enough to play on the lag in understanding. Thus, financial assets float and chase their own tails like the Ouroboros, but no one—especially not the elites—will explain this to the people.

No one is going to tell citizens and their representatives that financial assets are suspended in mid-air.The fictions must be maintained: the role of saving, of fundamentals, and of the central bank that “creates” money. The real workings of the system must be hidden—namely, that government debts are ultimately self-validated and financed through subtle revolving mechanisms.No one is going to explain the role of the “basis trade,” repos, and reverse repos. In universities, the reality of endogenous money is barely taught.This silent, unacknowledged practice nevertheless has its limits. The movement only appears perpetual.It faces several real constraints:

• Inflation: too much money created for an insufficient real supply will always erode purchasing power in the end.
• Loss of confidence by investors and markets.
• Crowding-out effects on the private economy.
• Geopolitical constraints: countries that abuse this mechanism see their currency gradually lose its status.
• The development of a purely speculative, bubbly financial market driven by animal spirits and increasingly uncontrollable, to the point of holding authorities hostage.
• Interest rates will need to fall over the medium and long term. Governments cannot indefinitely absorb a rising interest burden without jeopardising perceptions of the political and social sustainability of their debt.

When the next recession arrives, the reflex will be immediate: still more debt, still more monetisation, still lower rates.

Governments’ needs largely create their own financing. But we have not invented perpetual motion.We have put in place a sophisticated system for perpetually postponing adjustments, under the cover of sovereign debt and discreet monetary creation, supported and facilitated by the inflation of asset prices through speculative activity. The whole thing reminds me of the Assignats of the French Revolution, transposed to a global scale.

We are living in an illusion. Governments and their technocrats are illusionists: they make you look where the action is not—at central bank balance sheets—while the real action is elsewhere: on the markets, in the balance-sheet capacities of the major banks and the vast shadow banking system.

Those are the true central players.As long as anaemic growth and monetary credibility hold, the carousel continues. But monetary history is clear: all systems of this type eventually reach their limits—open inflation, brutal adjustment, or loss of currency status.In a long-term patrimonial or family perspective, the most rational bet today remains real assets: gold, commodities, and productive assets capable of withstanding the inevitable monetary dilution.