© 2019 by Henry Thornton. 

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January 25, 2020

The Honours have been distributed, the fires have been somewhat tamed with the help of heavy rain and cooler weather, Melbourne has been blessed by heavy rainfall with red dust from central Australia. But the damage from the fires is horrendous and is a long way from b...

January 11, 2020

Relatively quiet wind, some rain and cooler temperatures have helped calm the bushfires around Australia.  This gives the firefighters some respite but still working to burn off dangerous scrub and put out some of the burning bush. When intense heat and strong winds oc...

January 5, 2020

For several weeks - or is in months - bushfires have been raging in various parts of Australia. Western Australia, South Australia, New South Australia and Victoria have all suffered enormous fire damage. People have died, stock and wild animals are dead or wandering a...

December 29, 2019

Happy new year, gentle readers, and every good result for you and your loved ones in 2020.

Readers will be aware of my unhappiness about the state of the Australian economy and the lack of coherent advice likely to greatly improve matters. Today I report on the first su...

December 21, 2019

The dreadful fires are costing lives, houses, stock and trees, By next winter we need a plan.  In my view, it should include firebreaks, burning excess scrub, building dams and increasing penalties for arson.

Economy at 'gentle turning point' is Philip Lowe's judgment....

December 13, 2019

The UK general election is over.  Boris Johnson and his party have had a massive win, Labor (without Jeremy Corben)  look like two term losers.  Now the real grunt matters are up for conclusion.  BREXIT is going to happen. Will it be ‘hard’ or ‘soft’ BREXIT or ‘sorry c...

December 11, 2019

We have enjoyed two weeks in Malaysia.  It is an exciting country, with scads of potential. Our host’s parents and his wife’s parents were from China, and our guest spent a decade in Australia as a Commerce student at Melbourne University and then working for a major a...

December 7, 2019

This blog is written from Sandaken in Malaysia. Great fun with existing friends in KL and now with fellow travellers here.  When internet works – intermittent here- we can read Aussie news, but today is not such a day. So we present one of the past weeks best commentar...

November 30, 2019

Last week’s Blog stirred unusual comments from readers, mostly pleased I had opened the subject.

Today I list Australian Royal Commissions since the year 2000.  Also listed are various poor or illegal activities that come to mind from recent news items or casual observa...

November 23, 2019

Well done Westpac, 23 million (million, how can it be that bad?) dud transactions, a substantial number of which involving pedophiles sending money to their clients in the Philliphines.  There has been an apology – not to the victims of pedophiles, mind. But no board o...

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The next financial crisis ... is inevitable

The weekend AFR's article reporting the GFC work to save our financial system was interesting. RBA chief Glenn Steven is reported as saying something like: 'We flooded the system with liquidity'. (An action recommended by Bagehot all those years ago.)

Coincidentally, this week's Economist looks at the global equivalent under the heading 'Has finance been fixed?'

It concludes: 'Policymakers have made the economy safer, but they still have plenty of lessons to learn. And fracturing geopolitics make globalised finance even harder to deal with. A decade after Lehman failed, finance has a worrying amount to fix.'

Deep within the article is a statement I have not heard before.

'The Fed acted as lender of last resort to the world, offering foreigners $1trn of liquidity.

[other sources say total swaps were more like $ 11 trn]   Since then, offshore dollar debts have roughly doubled. In the next crisis, America’s political system is unlikely to let the Fed act as the backstop to this vast system, even after Donald Trump leaves the White House.'

This is a truly scary remark.

Comments welcome. Contact Henry here.



Who is Henry

 Henry Then...

"Henry Thornton (1760-1815) was a banker, M.P., philanthropist, and a leading figure in the influential group of Evangelicals that was known as the Clapham set. His 'Enquiry into the Nature and Effects of the Paper Credit of Great Britain (1802)' is an amazing performance. "...it anticipates in some points the analytic developments of a century to come. No other performance of the period will bear comparison with it, though several, among them Ricardo's, met with much greater success at the time as well as later... He was one of those men who see things clearly and who express with unassuming simplicity what they see."

This is the judgment of Joseph Schumpeter, one of the twentieth century's finest economists, in his monumental 'History of Economic Analysis', Allen and Unwin, 1954, p.689.


Henry Now...


Henry Thornton is the nom de plume of a prominent economist. Like his predecessor the modern Henry Thornton has been a banker and an advisor to M.P.s although he is not a politician himself. He is no evangelist but is keenly interested in a wide range of economic, social and political issues... 

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