© 2019 by Henry Thornton. 

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November 8, 2017

The world economy is 'in the red zone', 'navigating in dangerous waters', 'completely stuffed' and a variety of other colorful and depressing descriptions. As the opening sentence of my book Great Crises of Capitalism asserts, the world may still experience a depressio...

September 17, 2017

The fathers of Federation worked hard for a decade to persuade people living in our Island-continent to vote to form of a new nation to be called Australia. In the end, each 'Australian' colony agreed to join, although New Zealand declined.

During both world wars, Austr...

May 11, 2017

The Hon Scott Morrison          

Treasurer of Australia
Parliament House
Canberra, ACT, 2600

Dear Treasurer

Aspects of economic policy

Congratulations on your 'Plan B' budget.  A great pity you were not allowed by the opposition and the Senate to do mor...

March 3, 2017

'It's not a bubble' say the housing boosters, even though average Sydney house prices have risen by 19 % over the past year after years of double-digit price increases.  The mighty OECD have expressed concern, suggesting sensibly enough that a collapse might plunge Aus...

October 18, 2016

A lifetime's hard work, mostly pro bono. 'Thank your mother for the rabbit' type of activity.



1. Practitioner

1.1  On the edge of chaos, 1995

Biographical account of the rise and fall of a central banker

1.2  Money, Prices and Output, 1975.   [Link to be pro...

October 17, 2016

Biographical talk about Australia's financial system, presented at Melbourne University in June 1995. For young RBAers: be careful how much courage you bring to your work; and will you be supported by your bosses if you overrstep the mark?


October 17, 2016

My new red peddle car was stolen on my first day at kindergarten. I was an average performer at school, below average after a severe viral illness suffered in year ten. The effects of this illness however made me a far better footballer, a reasonable net outcome I thou...

October 2, 2016

Martin Wolf reviews for The Economist a book by Sebastian Mallaby about the life and times of Alan Greenspan.

Paul Volcker was the brave man who crushed (goods and services) inflation. Alan Greenspan 


September 14, 2016

Larry Summers has said: ‘If interest rates are negative, all the verities are up for grabs'

Mervyn King has warned: ‘The economy is behaving in ways we did not expect, and new ideas will be needed if we are to prevent a repetition of the Great Recession and restore pros...

August 3, 2016

We were quickly allowed to exit Tanzania into the no man’s land before Kenya. The queue before the Kenyan customs post was short, and soon we were sitting on chairs before a uniformed custom’s official. Vision and mission statements for customs and immigration were pro...

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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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