© 2019 by Henry Thornton. 

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September 26, 2018

Gender inequality in the news again, 28/9

Gender inequality in the news again, recently on Credlin, today in the OZ, presented in both places by John Slater of the Menzies Research Centre.

'What might McManus make of an industry where top ranking executives are paid in e...

September 8, 2018

When God is reduced to The Cosmic Therapist and we combat the culture wars' defeat of Christian conservatives with a middle-class moralism that prescribes being happy with oneself and nice to others, as Rod Dreher's The Benedict Option  argues, we are bringing knives t...

July 16, 2017

The best account of the rise and fall of asset prices is by Hyman Minsky. His 'financial instability hypothesis'  is the best way to understand why modern economies have self-contained booms and busts. In modern economies, an often long period of 'Tranquility' with sou...

July 10, 2017

We apologise for late posting of this contribution. Technical factors baffled Henry's editor for three days.  And please forgive the sillyness of a frustrated writer.

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Big meeting of G20 in Germany. Our current PM, Mr Trum...

June 24, 2017

The Turnbull government has taken another step 'forward' - or is it - with the Senate approving the Gonski 2.1 package of new higher spending on school education. (2.1 because extra money was needed to bribe cross bench Senators but sadly Catholics remain unhappy and m...

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

Economics

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...

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NEWS + VIEWS

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.

 

Henry.Thornton@henrythornton.com

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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