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RP’s Diary

The Money Trap revisited

What is the money trap? How can we get out of it? Let me try to reformulate the thesis of my book in the light of recent developments. Since the 1970s we have been in a period of transition to a new paradigm of monetary policy. Governments have tried various approaches to the challenges of…
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Mistreating money

  Money is a social construct that enables price comparisons, calculations of profits and loss, budgeting and financial planning from individual to enterprise to national and international  levels. Its primary function is as a unit of account, and a given monetary unit has greatest benefit when used by the largest possible number of people and…
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Status quo or needed reforms?

Interests barring change Powerful interests benefit from the existence of the money trap. These interests include the state and the monied elite. They benefit, at least in the short to medium term, from official manipulation of money under the present (IT plus CBI)  regime – the state from cheap finance, the monied elite from the…
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Gold price – is the bottom in?

Gold bears may soon have to think again

Gold investors are debating whether “the bottom is in” for gold – the dollar price is already 19% percent above its seven year low of  $1050 reached in December. Many gold experts remain bearish on the view that the dollar will stay strong against other currencies. And market analysts cling to the view that the…
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Stop activist monetary policies now

Central banks should focus on banking not money

  Central banks confront the kind of scenario outlined in The Money Trap. In the book, I anticipated a world of generalised deflation, with zero nominal rates on risk-free assets.  At the time of publication, in 2012, this seemed unlikely, to say the least. But it is materialising. The challenge now is to seize the…
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Recycling the rewards of equity finance

How vested interests bar financial reform

There is an urgent need to reintegrate society with its productive side through broadening share ownership. This is the theme  of a new book,  “Debtonator”. (Elliott and Thompson, £9.99), by Andrew McNally, an experienced institutional investor. In a lively account, McNally shows how equity finance benefits society, companies and individuals. Equity should form the basis…
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Are investors right to pin their hopes on central banks?

They remain key determinants of stock market valuations

Central banks disown any responsibility for stock markets; yet we all know they take market conditions into account. How will they respond if the turmoil resumes? Apparently the banks want central banks to get interest rates back to “normal”. Axel Weber, head of UBS, former head of the Bundesbank and former council member of the…
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Scary scenarios for investors

What to invest in? Investors are at their wits’ end. What should they do to protect their assets? Well, your choice of assets depends on what you think central banks will do – especially if the stock market rout goes on. Will they EITHER extend/revive QE, keep rates low and  print more money? OR will…
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What would be the ideal money?

German newspaper discusses the concept behind the Ikon

To prevent a new eruption of the financial volcano we need deep monetary reform – much more radical change than anything discussed by governments or economists as yet. So any signs of such an interest are encouraging. On July 8 and 14 of this year, Gerald Braunberger, economics editor of the Frankfurter Allgemeine Zeitung,  wrote two articles…
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Money, civilisation and their discontents

QE increases state money but reduces the quality of money

The usual way to destroy the social value of money is through inflation, and that has indeed been the fate of most fiat currencies. Yet there are other ways to reduce the quality of money and thus its ability to support a civilisation. Money becomes less useful, for example, when the objects you can spend…
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