Archive for March, 2014

Monetary policy.

March 16, 2014

Inflation targeting made central banks reluctant to accommodate the deflationary effects of China’s entry into the world trading system. The excessive liquidity they created fed the credit bubble. The 2008 Crash: Causes, December 2012.

Cabinet member Vince Cable said “It would be useful . . . to take account of different forms of inflation – imported and domestic – as well as asset inflation”. “Alternative targets”, in Inflation, interest, money supply: Targets, 18 February 2013.

The governor of the Bank of England favours regulation, resolution and restructuring for banks. They should rely less on debt, a resolution mechanism is needed for failing banks, and High Street banking should be kept separate from other banking operations. “Three Rs”, in The 2008 Crash: Reregulation, 3 May 2012.

Modern Monetary Theory says government deficits are always good, even when the economy is in good shape, unless there’s a risk of runaway inflation. Monetary sects, February 2012.

The Positive Money campaign isn’t targeting the kind of banking which was a factor in the 2008 financial crisis, and won’t stop the creation of money by private banks. Positive Money, March 2014.

In the eurozone, average current account deficits between 1999 to 2007 are a better indicator of current problems than fiscal deficits or public debt. The euro and the pound. 7 December 2011.