The true significance of the $1 trillion coin

dollar sign sinking in sea

Under President Obama the debt of the United States government has grown by about 50%, and now stands at close to $16 trillion. Every year, the US government spends between $1.2 and $1.5 trillion more than it takes in. Every day that financial markets are open the US government has to borrow an additional $4 billion. The pathetic fiscal cliff ‘compromise’ of last week has proved the most cynical students of the political elite correct in that there is not a snowball’s chance in hell that Washington will ever get this under … [Read more...]

It’s a mad mad mad mad world

"Pioneer of guidance" Mark Carney

Shinzo Abe, Japan’s new prime minister, has some exciting new ideas about how to make Japan’s economy grow. How about the government borrows a lot of money and spends it on building bridges and roads all over the country? If that doesn’t sound so new, it is because it isn’t. It is what Japan has been doing for 20 years, and it is the main reason why Japan is now the most heavily indebted nation on the planet – and still not growing a lot. Its debt-to-GDP ratio stands at an eye-watering, world-record 230 percent, which … [Read more...]

“Watching your money disappear” – Speech to senior representatives of the UK pension fund industry

money symbols getting sucked into a vortex

 Last week I spoke at the Open Forum Seminar organized by the European Pension Fund Investment Forum (EPFIF). The event was held at The Magic Circle, an organization for magicians that runs a theatre and a museum in London, both dedicated to the art of magic. Hence, the title of the seminar “Watching your money disappear.” Below is a transcript of my speech. Needless to say – but I say it anyway – the views expressed below are mine and not those of the EPFIF, any of the pension funds or any other speakers present at the … [Read more...]

The death of banks – and the future of money

Dodo

UK Chancellor George Osborne and Bank of England Governor Mervin King last week announced another round of fiscal and monetary stimulus measures, including steps to ease the funding for banks and allow them to extend more loans. If these measures were hoped to instil confidence they must be classified as a failure. We have lived through quite a few years of unprecedented and fairly persistent monetary accommodation and occasional rounds of QE by now, and I doubt that yet another dose of the same medicine will cause great … [Read more...]

The second crisis of socialism

Communist Propaganda Poster

 The world is facing the worst financial crisis since at least the 1930s "if not ever," the Governor of the Bank of England said last week when he explained to an increasingly sceptical and weary public the Bank's decision to print yet more fiat money and use it to buy yet more government bonds. I doubt that his words or his actions will do much to restore confidence. And they will not mean an end to this crisis. What type of crisis is this? This is a financial crisis for sure. Its root causes are firmly located in money, … [Read more...]

The State – Bank Alliance

Twenty Pound Notes

The public is mad with the bankers, and it should be. It has every right to be. But the public should be equally mad with the state and the politicians, maybe more so. In any case, these two groups are in cahoots, and the rest of us pay the price. This price comes in the form of distorted markets, artificial booms with severe busts attached to them, mountains of debt and rising inflation. The state-bank alliance is the very antithesis to capitalism and free markets. And state and banks are eager to sustain it. Let us take … [Read more...]