RP’s Diary
Keynes, Mundell and The Money Trap
The vast majority of economists have no answers.
Most economic commentary, such as that of Roubini, falls into this category (see Diary of 21/11/12). The “analysis” amounts to saying: “Oh, what a mess we are in!” We knew that already. Some vary their message by claiming to detect chinks of light in the gloom. Others conclude by saying things like, “If only the…
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“Oh, what a lovely slump!”
Reflections on Roubini's latest dirge
Older readers of this column may remember a British film of the late 1960s called “Oh, What a Lovely War”, a skit on the first world war, using popular songs of the time, starring the likes of John Gielgud, Laurence Olivier, Vanessa Redgrave and Maggie Smith (her of the TV series “Downton Abbey” )….
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It’s the system, stupid!
Is anybody listening?
One very senior former policy-maker has written to express his broad agreement with the analysis in The Money Trap. He cites three sentences on page 33, which sum up my review of the performance of the world economy since the collapse of Bretton Woods in the early 1970s: “The severity of the financial crisis…
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A five-point reform plan
An operational summary of the Ikon monetary standard
Joseph Potvin of The Opman Company has sent me an “operational summary of the Ikon monetary standard and unit of account”, which I am pleased to share with visitors to this website. Thank you, Joseph, for going through the book so carefully and distilling the reforms it proposes in Part 4 to the global…
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The governor stakes revisited
The worse the outlook, the more gloomy I get about George Osborne’s choice
I have mentioned the familiar names – Tucker, Vickers, Turner, Burns. Of these Paul Tucker has the deepest grasp of the issues the new governor will confront, and he is getting encouragingly more radical on bank reform – like everybody else. Even Lord Turner has been asking questions about the whole viability of fractional…
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Why gold is back
Investors are buying gold as governments have failed to get us out of the money trap.
In investment terms, we face a scenario that says neither bonds nor equities are likely to rise. The ‘uncertainty’ is greater than ever. And it is ‘uncertainty’ that drives people into gold, not relative values in paper currencies. We have to think that gold is the central thing around which everything else moves….
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Eurozone to lead world out of the money trap?
The eurozone as a policy laboratory
There is a long, long way to go. But confidence is gradually returning to the eurozone – confidence that at least a break-up of the eurozone will be avoided (thought his does not exclude the possibility that Greece may leave). The fall in spreads on Spanish and Italian bonds over German bunds is one…
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The Sun King and The Money Trap
The governor made mistakes but has also pressed for necessary reforms.
The knives are out for Sir Mervyn (“The Sun” ) King. Commentators who once stood in awe now rush to condemn him.This is not a pretty sight. It is also unfair to someone who, while not being the right man to manage the UK’s biggest financial crisis ever, has made important contributions to re-thinking…
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Is it to be a Burns-Vickers double-act?
Chancellor close to a decision
Recent suggestions that Lord (Terry) Burns may be appointed chairman of a revitalised Court (Board of Directors) with greater powers of surveillance than the present Court make a lot of sense. That means the choice of governor, who will serve one term of eight years, may be between Paul Tucker, deputy governor, and Sir John…
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Central banks remain stuck in the trap
The true lessons of the crisis have yet to be learnt
Mervyn King has mounted a defence of inflation targeting. Monetary policy, he claims, is part of the solution to the crisis, not part of the problem. This view was echoed by many official spokesmen at the recent IMF meeting in Tokyo. Christine Lagarde praised the central banks. There are quite minor…
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