© 2019 by Henry Thornton. 

  • Grey Twitter Icon

January 18, 2020

Increasing numbers of economists and journalists are questioning the RBA’s arguably nutty rate cuts.  I am reminded of a discussion in the RBA’s Executive Committee many years ago when the boss got down to tin tacks. ‘I’ve read the act carefully. I can’t be sacked unle...

January 8, 2020

This chapter addresses one of the most difficult issues in Macroeconomics, how to increase useful economic growth. While fiscal and monetary policies can derail growth if handled badly, new ideas applied by real businesses are the main source of increased economic grow...

January 8, 2020

As the great bard put it, “There is a tide in the affairs of men, which, taken at the flood, leads on to fortune …” The tide was taken in 1983 and the floating of the Australian dollar was an overdue reform that helped make Australia one of the most successful nations.


December 15, 2019

These images come from my journey from untrained teenage religious painter (earliest image) to a more fulltime practitioner. Most are fairly standard landscapes, though two are obvious precursors to recent EconArt, documented separately and linked here. 


October 20, 2019

The highly professional and detailed monthly RBA report is designed to demonstrate that no stone has been left unturned. However, there is at least one appararently small stone that demonstrates that there is a large rock left unturned. The apparent small stone is this...

July 13, 2019

The RBA has cut cash interest rates by 50 basis points and more cuts are expected.  The government has cut tax rates for low and middle earners. Some more infrastructure is in the pipeline. APRA has softened restrictions on bank lending.  

Enough is enoug...

June 26, 2019

‘Investors Are Glum, Even With Stocks at All-Time Highs’ writes Akane Otani in the Wall Street Journal.

This comes from the digital version of the WSJ, which apparently can be available free, though I could not wait for minutes to find out. A complementary article in th...

May 26, 2019

The election is over, suprising most people and especially Bill Shorten. 'Elbo' is about to take over the poisoned chalice of opposition leader, several ordinarily ambitious fellow travelers having declined to stand, most awkwardly the previous Shadow Treasurer who see...

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