Monetary System

Today, it is euro banks that are the problem. For example, Goldman Analyst Alan Brazil suggests that euro banks need $1 trillion in additional capital. This has created distress in funding markets, particularly because of US money market…

Alright, I have a mea culpa here. Check out this quote from June 2008

Wow! Just came across this piece from the FT about the concerns of the International Accounting Standards Board (IASB) of how European financial institutions have not reserved enough against potential credit losses on their Greece sovereign…

This week we examine coinage from Roman times to the present in Western society.

“Taxes drive money”—these “money things” are accepted because there are taxes “backing them up”, not because they have embodied gold. As promised, this week I will begin try to dispel the view that coins used to be commodity monies.

We should observe a blowout in Eurozone interbank spreads. And while we may still see this in the coming weeks, we have not seen anything resembling 2008 levels of panic.

I appreciate the role that Krugman plays. Like many of you, I enjoy reading his blogs and more often than not, I agree with him. He is almost the lone, sane, voice in a position of authority who argues against the standard deficit…

While rate easing and its cousin permanent zero might have some salutary effect in the short term, these policies are toxic to the financial sector and consumption demand. Likely, they will not spur the economy but lead to a deepening…

Previous Modern Money primer blog posts were quite general and apply to all countries that use a domestic currency. It does not matter whether these currencies are pegged to a foreign currency or to a precious metal, or whether they are…

Last summer I wrote a post clarifying some points that I have learned about Modern Monetary Theory. The genesis of the post was a gross mischaracterization of Modern Money Theory (MMT) by Paul Krugman in a piece called “I Would Do Anything…