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Tag Archives: Finance & Regulation

Central bankers, inflation “cousins” & the real threat to the global economy

 Kaye Wiggins in the Financial Times explains that private equity groups, including Blackrock, deliberately inflate the value of their own assets – by buying and then selling said assets to themselves. She shows that the buyout business resembles a pyramid scheme with “circular” deals sold between and within private ownership at high valuations – fuelling asset price inflation. “Windscreen repair and replacement company Belron, which operates internationally under brands including Autoglass...

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PRIME’s 2022 forecast

Each year the Financial Times invites economists to answer an economic survey for the British economy. This is PRIME’s submission. 1. UK economy Will the UK economy outpace or lag behind other developed economies in 2022 and why? UK trade performance on imports and exports has been among the worst of all OECD economies, with Brexit exacerbating the pandemic. This significant fall in total trade (compared to 2018) is an outcome, or consequence, of weak economic activity at home. Flat...

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Reclaiming Central Banks

This article first appeared on the Project Syndicate website on 21st September, 2021 Fifty years ago, a US president closed the gold window, ended capital controls, and launched a new era of globalized finance. The “Nixon Shock” reshaped the international monetary system overnight, and then gradually changed the status of central bankers. Instead of acting as servants of the domestic economy, monetary policymakers have become masters of the globalized and financialized world economy. And...

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Why are the long-term US Treasury yields falling?

This article first appeared in the Indian journal Economic and Political Weekly on 17 July, 2021. First, let me answer the question in the title: I do not know because, according to conventional theories, when the realised and expected inflation rates are as high as they are in the United States (US), the long-term US Treasury yields should go up. Although the realised and expected inflation rates have been going up since April 2021, the long-term US Treasury yields, however, have not been...

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Mr Keynes’ Revolution

Book Review, Mr Keynes’ Revolution: A Novel, E. J. Barnes, 2020, Greyfire publishing. In Mr Keynes’ Revolution, Emma Barnes makes Keynes the subject of a novel, and does so brilliantly. I cannot recommend the book highly enough to anyone interested in Keynes and wanting to get a sense of what he – and his economics – is about. I am no literary critic, but found the story-telling dramatic, highly engaging and touching. Above all (for me) Barnes has a powerful and sophisticated sense of the...

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The Battle of GameStop

This article originally appeared in the Indian journal Economic and Political Weekly on 13 March 2021. What the battle of GameStop has brought into light is that democracy in financial markets is just a myth: whoever controls the valves, controls the flow. The market-making and brokerage markets in the United States are heavily oligopolistic markets in which market-makers and brokers extract huge rents from the retail traders. Although the retail traders involved in the battle appear...

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COP26: US gifts Wall St the Green New Deal

This article first appeared on Substack. Last week the Biden team delivered their first press conference on the Democrat’s much-anticipated Climate Plan. The good news is that Climate Envoy, John Kerry and Advisor, Gina McCarthy are talking about the Climate Plan delivering “Good paying Union Jobs”. All hail to that ambition. The bad news is that this ain’t no Rooseveltian New Deal. Roosevelt confronted Wall St from the get go. His administration systematically drained the Street of power,...

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The case for an Ecological Interest Rate

Between the Anglo-American political horror shows of 2020 and the raging pandemic, something much less theatrical drifted centre stage to play a more than usually important role: interest rates. There is one obvious reason: like waiting to witness a rare celestial event there is a high likelihood that rates will do a shocking, unusual thing and go negative. But there is another important reason that hasn’t, to date, been part of mainstream economic commentary. With more focus than ever on a...

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The Wealth of Corporations: Why Firms Have Zero Net Worth, and Why It Matters

“Financial Assets = Liabilities.” It’s one of the great accounting-identity truisms of economic understanding — both among traditional, mainstream economists, and even (especially) among many heterodox, “accounting based” practitioners. It seems obvious: When a company issues and sells bonds, it posts a liability to its balance sheet; the bond buyers hold financial assets on theirs.[1] The problem is, that truism isn’t even close to true. The most obvious example is corporate...

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Put Fairness at the Heart of Finance

This article appeared in the UK-based Church Times on 26 June, 2020 The coronavirus pandemic is a moment of reckoning for globalisation and our international financial system. The pandemic has shown how unjust the international system is towards low income countries; given us the opportunity to imagine another economy; and served as a warning.  If we do not fix the system to prepare for the coming, graver crisis of earth systems breakdown, the survival of humanity is at risk. Just as it was...

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