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The ECB’s bond-buying programme – “a grave menace to our civilisation”?


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The European Central Bank has announced a programme of bond-buying of €60 billion a month, to be carried out at least until end-Sept 2016. Monetary policy around the world remains in the midst of a remarkable experiment: money creation is expected sustainably to solve real economic problems. It is possible that there is something dangerously wrong with mainstream economic thought. Hayek’s conclusion to The Pure Theory of Capital is a spectacular rant against those economists who consider only the short-run, surface […]

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Speech on Money Creation and Society


A lady in Wycombe recently asked me the following questions: Why is my house valued higher than its worth? Why do crashes keep happening every 8 years? Who owns the money supply and how does it relate to gold? Why haven’t I had cost of living pay rise for 7 years yet the CEO has just bought a pacific island? Why do quarterly targets keep going up at work and what is the end game of this model? Why has […]

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Understanding the Money Creation and Society Debate


Together with colleagues spanning four parties – Michael Meacher (Lab), Caroline Lucas (Green), Douglas Carswell (UKIP) and David Davis (Con) – I have secured a debate on Money Creation and Society for Thursday 20 November. Here’s a quick guide to understanding the debate. First, we have a system of paper or “fiat” money: it exists due to legal mandate as opposed to being a physical commodity like gold. Reserves, notes and coins are created by the state but claims on money […]

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Book review: The Golden Revolution – How to prepare for the coming global gold standard, Butler


Conservative economic policy is easily recognised when stated as balanced budgets, low taxes and sound money. Today, these are a distant prospect. For all the work the Government have done, this year’s net financing requirement is £144.9 billion, larger than the health budget (£140bn) or education (£98bn). As my weekend brief explains, “The Government have delivered a typical tax cut of £705 for over 25 million people and taken over 3 million people out of [income] tax altogether”, however, please contact […]

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Keynes, Carney and the corruption of capitalism


We’ve come a long way since the Bank of England’s Andy Haldane pointed out that they had “intentionally blown the biggest government bond bubble in history” and that it constituted the biggest risk to financial stability. Yesterday, in his Sky News interview, the Bank’s Governor Mark Carney said that the housing market was the biggest risk to financial stability. Selected headlines from the recent press continue the story: U.K. House Prices Rise to Record High in April – “U.K. house prices hit […]

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The Four Horsemen, Russell Brand and the biggest problem with democracy


I found time this morning to watch the film Four Horsemen. It’s about what’s fundamentally wrong with the world and it features some major thinkers from Britain and the world. I feel fairly sure many of them did not know that the central point of the film is to explain why money should be separated from the state. As I set out in my maiden speech, Today, money is a product of the state. The Bank of England controls the […]

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The central banks have backed their economies into a corner


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Yesterday, the US Federal Reserve decided not to reduce its money creation programme of $85 billion a month. The Cobden Centre publishes a response, No tapering, no surprise: It was not too surprising that there is going to be no tapering for some very good reasons. The commencement of tapering would have led deliberately to bond yields rising, triggered by an increase in sales of government bonds to the public and at the same time escalating sales by foreign governments as […]

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House price inflation and the madness of monetary socialism


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Via House price inflation should be capped at 5pc, RICS says – Telegraph, House prices should be prevented from rising by more than 5pc a year to stop another bubble destabilising the economy, a top property institute has urged. For comparison, the UK inflation target is 2%. The RICS story is here. With excessive price growth and high mortgage lending having led to a vulnerable banking sector, specific policy on limiting growth is needed. Such a policy could be implemented […]

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The German way of 1923


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I chanced this morning on the superb collection of essays from Ludwig von Mises, The Causes of the Economic Crisis and Other Essays Before and After the Great Depression (PDF). In his Stabilization of the Monetary Unit—From the Viewpoint of Theory written in 1923, he showed considerable foresight: Only the hopelessly confirmed statist can cherish the hope that a money, continually declining in value, may be maintained in use as money over the long run. That the German mark is […]

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Bank reform demands monetary reform – an essay for Banking 2020


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Today sees the return of the Financial Services (Banking Reform) Bill to Parliament. It does not do enough. In the book Banking 2020: A vision for the future, my essay summarises the institutional problems with our monetary and banking orthodoxy: The features of today’s banking system As Governor of the Bank of England Sir Mervyn King told us in 2010: ‘Of all the many ways of organising banking, the worst is the one we have today.’ Notes and coins are irredeemable: the promise […]

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