© 2019 by Henry Thornton. 

  • Grey Twitter Icon

September 24, 2016

Former Treasury secretary, now Chairman of a large bank, Dr Ken Henry, warns Australia of potential catastrophe. Paul Kelly reports: ' National Australia Bank chairman and former Treasury chief Ken Henry warns that Australia faces an unacceptable risk with its budget d...

September 17, 2016

Congratulations William Coleman, Peter Costello and Paul Kelly. Finally the start of a serious discussion about Australia's core ideology.  Are we the land of laid back egalitarian mateship according to the famous 'Australian settlement'? Or are we a dynamic, successfu...

September 4, 2016

Last week's disappearing government was a shocking way for the new Turnbull-lead coalition mob to begin a new parliament.  Did no-one think their absence might give their government a bad time or even lead to something being passed that was against government policy?...

August 21, 2016

Another big week of private sector economists and businesspersons pleading with the Turnbull government to behave like a serious government.  Paul Keating’s heroic effort to turn the budget deficit into a surplus to head off ‘Banana Republic #1’ cannot be overemphasise...

August 20, 2016

Henry's editor, Pete Jonson, has recently decisively wound back his corporate involvement. He is now fulfilling the promise he made to himself as a young part-time landscape painter that he would, later in life, spend more time painting. This time has arrived; and Pete...

August 14, 2016


Crocodile tears are being shed for Australia's too buoyant exchange rate, which keeps trying to creep upwards despite interest rates being cut to levels that threaten economic stability.

Henry regrets that the RBA did not take seriously his early 2013 call for...

August 6, 2016

Some nice economic/politicio analysis today, gentle readers, though not from the government. Alan Kohler says: 'banks are going to have to return interest rates to normal without having declared victory in their fight against low inflation and falling investment. It wi...

July 31, 2016

Now Grace Collier has joined the battle to kill the Turnbull/Morrison/O’Dwyer attempt to tax superannuation of well-to-do Australians. Her most powerful point is to quote Kelly O’Dwyer and Scott Morrison asserting superannuation earnings would never be taxed by a Liber...

July 1, 2016

Will the UK leaving the European Economic Union hurt or improve the UK economy? Will the Brexit precipitate further exits and create real problems for the EEC. Henry grapples with deep uncertainty.

So far, economic implications of Britain’s likely exit from the European...

June 5, 2016

A reader has commented on the first report of Henry’s 2016 liason expedition. ‘We too noted incredible civility and politeness on our trip – not only in the hotels but also on the street, with folk actually taking us to where we wanted to go. I think web pages such as...

Please reload


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... 

Never Miss a Post. 
Subscribe Now!

Subscribe to Henry Thornton and be alerted the next time Henry shares some pearls of wisdom.

Please reload

Last Posts
Please reload