© 2019 by Henry Thornton. 

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March 26, 2019

Apologies, gentle readers. Henry and family have been in Brisvegas for a family wedding. A nephew of Mrs Thornton was married to a lovely girl from China, with parents and translation chicks in attendance. Why the speeches and bad jokes were not translated into Mandari...

March 17, 2019

Shocking mass killing in New Zealand. Much grieving to be done and (we hope) gun policy to be greatly tightened. Our best wishes to survivors and loved ones of the dead and injured.

A two horse race may be won by either horse.  Yet Australia’s coming Federal election lo...

March 10, 2019

The PM is not amused, but sadly for the rest of us we are in the third income recession since the real 1990/91 recession blighted lives. An income recession is defined as real GDP relative to population, ie GDP relative to population.  In the real recession of  1990/91...

February 23, 2019

The International Monetary Fund has advised Australia that economic growth will be lower than predicted by Treasury and the RBA, perhaps 2.5 % in the absence of serious economic reform..  (Timing is all, and the leading policy wonks in Australia probably now agree with...

February 21, 2019

A weekend of sun and surf at Pearl Beach. Driven by a client in a new car, we travelled from Sydney at the maximum allowable speed along the Pacific Motorway, a different entity than the Pacific Highway. Unlike Melbourne’s Monash Freeway, there were almost no trucks on...

February 10, 2019

It has been the week of the Royal Commission report. The general response is that it was not as tough as we all suspected but will serve to clean the banking stables. Bank share prices surged despite what some found as scathing comments on the big banks and referrals o...

February 3, 2019

Holiday break over, it’s back to work, comrades. Bill Shorten on Insiders today, sneering at and sledging Scott Morrison and the coalition for all and every decision they’ve ever made. ‘We don’t care about a million elderly people living on their own savings.  We don’t...

January 27, 2019

We salute Richard 'Harry' Harris and Craig Challen, both jointly named 2019 Australian of the Year for their heroic efforts in saving 12 boys from a flooded cave in Thailand.  A wonderful achievement as were the efforts of other candidates. Overall a record number of g...

January 19, 2019

Big headline in the Oz yesterday will spook the punters – the government’s label for us ordinary folk. ‘Are we headed towards high noon for democracy?’

Henry Ergas reached back almost 100 years. ‘In 1923, as the Weimar Republic struggled with chaos, the German polymath...

January 6, 2019

I wish everyone a cheerful and successful new year, whilst knowing that outcome is impossible.

Today I attempt to document matters that look positive and matters that seem negative.

Positives, with necessary qualifications.

There is no major global war likely, though the...

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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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