Tag Archives: International Monetary System
The Ikon: the best world money
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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Are the chances of real reform improving?
In The Money Trap, I argue that our problems result from the way in which we have applied a particular concept of money – the state theory of money. This dominated government policy in the 20th century. As Keynes said, all modern money is state money – it is seen as a creature of…
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Kissinger calls for US to save the global order
Henry Kissinger says that today’s international order was “founded upon conceptions that emerged from the British Isles, were carried by Europe around the world, and ultimately took deep root in North America” He adds that “American leadership in reinvigorating the contemporary order is imperative.” In a few words, Kissinger shows a depth of understanding and a…
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Globalization: a warning from Brexit
“Yesterday’s vote speaks to the ongoing changes and challenges that are raised by globalization,” President Obama said yesterday in his first comment on the UK referendum. He is right. The “Out” vote should be viewed as part of the geo-political fallout of the financial crisis and the failure of governments and bodies such as…
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Brexit shows need for new rules on money
The vote for Brexit is about much more than the UK and Europe. It shows that new rules to guide the process of globalization are needed. The policies followed since the financial crisis have two major errors. First there is a failure to diagnose the true causes of the crisis. Second, governments have failed to…
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The Money Trap revisited
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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Status quo or needed reforms?
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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Stop activist monetary policies now
Central banks confront the kind of scenario outlined in The Money Trap. In the book, I anticipated a world of generalised deflation, with zero nominal rates on risk-free assets. At the time of publication, in 2012, this seemed unlikely, to say the least. But it is materialising. The challenge now is to seize the…
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Recycling the rewards of equity finance
There is an urgent need to reintegrate society with its productive side through broadening share ownership. This is the theme of a new book, “Debtonator”. (Elliott and Thompson, £9.99), by Andrew McNally, an experienced institutional investor. In a lively account, McNally shows how equity finance benefits society, companies and individuals. Equity should form the basis…
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Haldane , Rajan on the future of central banking
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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