Tag Archives: central banks
Golden opinions
The attributes of gold usually cited as making it useful as money are summed up by the World Gold Council as follows: “Gold’s scarcity, the fact that it does not corrode or tarnish, its malleability and status across civilisations have made it eminently suitable as a form of money.” There is more…
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1. In the Trap
To mark publication of the “bigger and better” 360-page paperback (at £16.99 from Amazon, with a new 38-page preface) this and the following posts list the book’s main themes, by Chapter, each with an update. Seen from November 2013, how have recent developments changed the analysis and/or policy prescription? Currrent Economic Outlook Although the short…
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III Four Challenges
The so-called international monetary non-system has four serious weaknesses. They are as follows: first, the absence of incentives to governments to correct global payments imbalances; secondly, the system’s dependence on one national currency, the US dollar, to serve as the major international reserve currency; thirdly, a dysfunctional financial sector and, fourthly, the systemic liability to…
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Central bankers should prepare for a new world
Central bankers are still trying to rescue their monetary policy models with some additional twists such as forward guidance, but not engaging in the fundamental re-think needed. (If you need better authority than I for this assertion, please do read Bill White in the Dallas Fed series here). Paul Tucker tells us that the new…
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Are the political conditions for reform out of reach?
Three major failures contributed to the global financial car crash • There was a failure of banking and bankers – imprudence and irresponsibility, tinged with instances of criminal behaviour, insider trading, mis-selling, deceit and fraud; • There was a failure of central bankers – they were seduced into assuming the self-stabilising properties of markets,…
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The epiphany of central banking
Having listened to the three witches, and acted accordingly, only to be betrayed ‘in depest consequence’, our hero ‘Macbeth’ reaches his ascendancy, which marks the start of his downfall. He has a moment of realisation… Have central banks also reached an epiphany? Central banks have been instructed to keep their eyes not only on…
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Central banks into equities
When I first proposed that central banks might hold a basket of diversified equities on the assets side of their balance sheets, it was an unheard-of notion. My friends advised me to take it out. “People will think you’re crazy”, they said. Now it turns out that that is exactly what a growing number of…
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How central banks undermine the market economy
The risks and dangers for the global economy are like hidden reefs for a ship – invisible but deadly. It is quite possible, for example, that expansionary US monetary policy can cause an asset boom in China so large that its collapse would bring the Chinese economy down with it – and thus throw the…
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Gold, credit and the Ikon: Three kinds of money
What are the differences between a commodity money, credit money and the Ikon – currency of the future ? Using the gold standard as an example of the first, where the price of gold was fixed and money was convertible into it on demand at that price, gold and sure claims on gold were money….
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Hypocritical protests at depositor bail-in proposal
Am I the only person to feel that the howls of moral outrage, protests and scathing editorials that greeted the first plan to “solve” the Cyprus banking crisis were somewhat overdone?. I myself joined in the criticism of the proposal to tax all deposits, and recommended the example of Iceland – while pointing out that Cyprus…
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