© 2019 by Henry Thornton. 

  • Grey Twitter Icon

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...

May 19, 2017

Budget and its effects, May 19

Both main sides continue to debate the second budget of the Turnbull government, with the most interesting development being the view expressed by Albanese that Labor should welcome the Coalition’s budget measures! But there is no indicati...

July 24, 2016

Love and Friendship.


Adapted from Lady Susan, a novella by Jane Austen. Director: Whit Stillman

Love and Friendship is based on a novella written by a 19-year-old Jane Austen.

Financial security is definitely the theme that dominates Love and Friendship, for in Austen’s...

... how high, how soon?

Despite the RBA Governor’s recent frankness on a ‘normal’ level of interest rates, there is still conjecture about the extent and timing of the coming rate rises. Applying a ‘forward-looking Taylor Rule’ that takes account of targets and current...

Please reload

 
 
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... 
 

Never Miss a Post. 
Subscribe Now!

Subscribe to Henry Thornton and be alerted the next time Henry shares some pearls of wisdom.

Tags
Please reload

Last Posts
Please reload