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Tag Archives: central banks

Are the chances of real reform improving?

  In The Money Trap, I argue that our problems result from the way in which we have applied a particular concept of money – the state theory of money. This dominated government policy in the 20th century. As Keynes said, all modern money is state money – it is seen as a creature of…
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Mad money: parallels with the 1970s

The current debate about monetary policies reminds me of the 1970s. Keynesian policies as then understood involved adjusting the fiscal “stance” of policy to ensure sufficient, but not excessive, effective demand. But these policies no longer had “traction”. The world was changing in ways that economists at the time struggled to understand.  Money was becoming…
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Wolf of the City

Martin Wolf’s recent radio programme – “How Low can Rates Go?” – described and illustrated the dilemmas facing monetary policy-makers. Nine years from the start of the great financial crisis, Wolf reported, economies had still not returned to “normal”.  Capitalism was perceived by many to be failing to deliver; globalisation a con trick.  The political…
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Globalization: a warning from Brexit

  “Yesterday’s vote speaks to the ongoing changes and challenges that are raised by globalization,” President Obama said yesterday in his first comment on the UK referendum. He is right. The “Out” vote should be viewed as part of the geo-political fallout of the financial crisis and the failure of governments and bodies such as…
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Brexit shows need for new rules on money

The vote for Brexit is about much more than the UK and Europe. It shows that new rules to guide the process of globalization are needed. The policies followed since the financial crisis have two major errors. First there is a failure to diagnose the true causes of the crisis. Second, governments have failed to…
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Mervyn King’s alarmist warning

According to the World Gold Council, Mervyn King, former governor of the Bank of England, believes that in certain circumstances China’s assets in the US could be “annulled”. Mervyn King’s alarmist warning is  made in an interview, entitled “Present perilous, future imperfect” that appears in the June issue of Gold Investor,  a WGC publication.  After pointing…
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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 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 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

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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