Official Money

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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  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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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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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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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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The book argued that the crisis was the joint product of  inflation targeting, irresponsible banking and a weak international monetary system. The book tried to show how these were inter-related: First, inflation targeting, which had been a valuable tool in combatting 1970s inflation, had by the 2000s outlived its usefulness as a guide and discipline for…
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William White, formerly head of monetary and economic affairs at the Bank for International Settlements and now chair of a key OECD committee,  is one of the few mainstream economists willing and eager to keep the debate about exchange rates systems alive. Most of them want to bury it. In a paper published by the…
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  Thank you for visiting my site. I am taking a sabbatical to research a new project so will not update my website for the next few months. Suffice to say that nothing governments or central banks have done since the crisis has changed the analysis or policy recommendations I offered in The Money Trap…
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  For many years  Lewis E. Lehrman and John D. Mueller have been calling attention to what they call the “reserve-currency curse.” Since some politicians and economists have recently insisted that the dollar’s official role as the world’s reserve currency is instead a great blessing, it is welcome that they have recently revisited the issue…
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  In his contribution to Central Banking’s 25th anniversary issue, Andrew Haldane, chief economist of the Bank of England, describes the “giant steps” that central banks have taken to “reinvent” themselves post crisis. These have involved innovations not only in monetary policies and in market operations but also the development of macro-prudential policies. Central bankers…
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