RP’s Diary
The G30 plays blind man’s bluff
The G30 has flinched from tackling the big obstacles standing in the way of long-term finance
Watching governments, central bankers and economists explore the remaining ruins of the old pre-2007 economic structure is like watching children playing a game of blind man’s bluff. Being blindfolded, they cannot see what is around them, and are compelled to rely on their other senses. Much amusement is to be had for the onlookers,…
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The turning point for gold – now what?
Gold has staged a dramatic comeback. How did the change come about? What's next?
Following my last post on gold, I got several comments: for and against. One said that the real reason gold has come back over the past 10 years is that central banks have stopped selling and started buying again. Indeed! Net gold purchases by central banks in 2012 were 534 tonnes –…
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Bury inflation targets and get a real monetary framework
How much agony do we have to endure first?
To wean central banks from inflation targeting you’ll have to snatch it from them by force; they are clutching it ever more tightly to their breasts. But they must bid it a tearful goodbye. The big question is what will replace it. Mark Carney has said that: “Flexible inflation targeting is the most successful…
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The Fed at 100
The Fed keeps on making the same mistakes
The Federal Reserve Act was signed into law by President Wilson on December 23 1913. Its purposes were “To provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes.”…
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A North Atlantic trade and currency zone?
Preparing for a possible break-up of the EU
David Cameron’s speech threatening to pull the UK out of the EU unless the other members agree to its demands may have started a process of withdrawal that could become irreversible. Although this outcome would be contrary to the stated objectives of the UK prime minister and British government, commentators on both sides of the…
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Gordon Brown on stubborn national politics
The former UK prime minister is worth listening to
Gordon Brown is far from being my favourite politician. As economic Czar of Britain’s Labour government from 1997 to 2007 he started well – struggling hard and long to establish fiscal credibility – only to throw it all away. He then spent a miserable three years as prime minister to 2010 trying to contain the…
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Regulation at a dead end
Look at what Andy Haldane, Charles Calomiris, Bill Isaac and Richard Fisher are saying
Last week Charles Goodhart uttered what I called his cry of despair (See RP’s Diary 13/01/13); now it is BOE’s Andy Haldane’s turn. Goodhart has realised that we are running out of monetary policy models – rules or frameworks like inflation targeting (IT) by which central banks steer interest rate policies. He warns of…
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Is real reform within our grasp?
Yes if we learn from people with something relevant to say
Not many central bankers or regulators are willing or able to think deeply about the nature of money and the implications of the collapse of trust in banking. Two exceptions are Mervyn King and Peter Praet. This post is about them and other thinkers worth attending to. King’s views are well known and he…
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Memories of Professor James Buchanan
Farewell to an heroic intellect
I first came across James Buchanan through his long-term collaborator and colleague, Professor Gordon Tullock. It must have been in 1972 or 1973. Gordon and I met by accident in Frankfurt, where I was interviewing the then president of the Bundesbank for The Banker, of which I was then editor. We had one of those…
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Goodhart’s cry of despair
The doyen of monetary economists grasps what is at stake
Five years after the international banking system fell into the arms of the central banks and governments, there is still a paralysing uncertainty about the extent and cost of regulation, the viability of banking models and the monetary policy regime. More about financial regulation and banking models in future columns. Now let us look…
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