© 2019 by Henry Thornton. 

  • Grey Twitter Icon

April 3, 2020

'Over the next decade two challenges face Australia which, in combination, seem likely to transform our strategic fortunes for the worse. The first challenge is the need to confront the reality that the great project of Western liberal globalism conceived in the 1990s...

March 21, 2020

The Morrison government is rightly concerned about the cost of saving the Australian economy.  When asked if he would be going to save companies that were in trouble, the Prime minister seemed not especially interested.  He is no doubt totting up the cost of the many p...

February 15, 2020

Lord Mervyn King is a former governor of the Bank of England, now a member of the House of Lords and an author.  His book, called The End of Alchemy. Money, Banking and the Future of the Global Economy, is important and radical in its conclusions. I have written about...

February 8, 2020

Different to what?  The ideas of the Reserve Bank, as exemplified by governor Philip Lowe's speech on 5 Feb 2020,  are  good examples of what I regards as 'soft Keynesian' views.  The logic is that the economy should be kept running at about its 'natural' rate, real GD...

December 20, 2019

Check out Pete's 2018 exhibition of EcoArt here.

Geoffrey Blainey

Oil paint on canvas

550 cm X 750 cm

Signed bottom left, 2019

Geoffrey is the artist's great friend, in my view one of the great historians of Australia with a wonderful feel for matters economic.  As well as...

October 17, 2019

Modern Crucifixion

 Oil on canvas board

24 '' x 16 "

Signed, Left Hand Side

Cardinal Pell's trial, where he was declared guilty by a jury of pedophile actions, was a deeply curious event. I expect appeal before by three judges will present a more believable judgment o...

October 6, 2019

The global economic news steadily gets worse.  Asset prices looks dangerously like the USA stock market in early 1929, unable to decide whether it is time for the great twenty-first century share price collapse. Ordinary consumer inflation remains very low, another fea...

November 10, 2018

'The insurgents  were crazy' the latest former PM said on ABC TV. 'Look at all my achievements - a strongly growing economy, etc, etc.

I forgot to write the list down, but the strong economy is due to excessive fiscal stimulus at the time of the GFC, when the Head of Tr...

October 13, 2018

One of the best forums for discussion of economic policy in Australia is the Economic Outlook conference jointly run by The Oz newspaper and the Melbourne Institute.  Paul Kelly, Editor-at-Large of the Oz always presents a fine overview of issues. Sadly, however, globa...

October 7, 2018

 And policies to protect the Australian economy.

The US dollar is roaring, Trump-like. The Aussie dollar is falling and may take a big tumble before long. This would not be catastrophic as the 'Aussie' (as our currency is denoted in international markets) has been fight...

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