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RP’s Diary

Society’s monetary guardians?

More on central bankers and economics

The question raised by my previous article may be expressed as follows: If central bankers see themselves as guardians of society’s money, why do they think that contemporary economics provides them with an appropriate professional training, since the discipline offers no special insights either into the nature of society or into the nature of money?…
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Do central banks rely too much on economists?

Economics is of only limited help in understanding money

If  economics is likened to a religion it is easy to see how it may be viewed as dangerous. It may blind its devotees to the claims of competing world-views. If  economists arrogantly claim that their special insight gives them the right to prescribe policy, it may provide spurious legitimacy for harmful actions. It may lead…
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How we got into the money trap – and how to get out

Why the world needs a new kind of money

The world took time to get into the money trap. But with one bound it can be free. Since the 1970s governments have tried various approaches to the challenges of managing money. In the 1970s, they put full employment top. They used monetary policies to expand demand, taking risks with inflation. The results included high…
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The Ikon: the best world money

Reliance on central banks does not offer a way out of the debt, money and low-growth traps.

States cannot create good money. They are interested parties. A good monetary system should discipline states – i.e. hold them to account. A state-run money cannot do that. That is the flaw in proposals such as those made by Positive Money and The International Movement for Monetary Reform. (Let me add, however, that I go…
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Brexit: Britain bows to its historic adversaries

Is there any comparable case of a great country voluntarily, without any need to do so, placing itself at the mercy of its historical adversaries? That is what the UK has done. Britain’s future is now at the disposal of the remaining countries of the European Union. After being weakened by the results of the…
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Since the crisis, what has happened?

Why we remain in The Money Trap

12 points: 1. Central bankers, who were by and large not responsible for supervision pre-crisis , immediately sought to pin the blame for it on regulators, diverting attention from monetary policies – stoking the credit boom, failing to sound the alarm for what they were responsible for, which often included a duty to monitor the…
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Gold, money, the 1980s and now

When did the culture of ‘money mania’ start? When did people first set out to grab as much money as possible at whatever cost?  When did the momentum for credit creation —paper money calling for more money — become unstoppable? Let us contrast the past 30 years with the years 1880-1910. Under the classical gold…
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What Brexit and Trump’s victory have in common

Trump rides to victory on a tide of popular anger

Many facile comparisons have been made between Brexit and the election of Donald Trump today. They have an important element in common. But the commentators have missed it. It is said that both represent a backlash against globalisation. Others say it is a revolt of the uneducated, the marginalised, the people who have been left…
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Brexit: Britain’s biggest mistake for 1,000 years

A long-term perspective reveals enormity of decision

Matthew Parris (The Times, Oct 15) says Brexit is set to be Britain’s biggest screw-up since the Suez crisis of 1956. It is worse than that. The invasion of Egypt to regain Western control of the Suez Canal was an ill-judged gesture,  from which Britain recovered quickly; Brexit is likely to prove its greatest mistake…
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The real reasons for low real rates

The lowest interest rates in history are failing to spur sustained recovery. Rather, low real rates mirror financial and structural weaknesses Economists cannot agree on the causes of these low real rates. They discuss various hypotheses. Central banks have held policy rates low for years – have these ultra low nominal rates reduced real rates,…
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