Monetary System

Here's the question: Can sovereignty and effective international supervision be reconciled when it comes to complex large financial institutions? Simon Johnson lays out a compelling case that they cannot. As he has said time and again,…

Over the last three decades the US financial sector has grown six times faster than nominal GDP. This column argues that there comes a point when the financial sector has a negative effect on growth – that is, when credit to the private…

. If China’s current account surplus declines, there are, very broadly, two ways this can affect the US. On the one hand the surplus can simply be transferred to another country. For example if China’s current account surplus declines…

We saw that Joseph Stiglitz proposes a new reserve currency to alleviate pressure on trade imbalances. Michael Pettis is now also proposing a similar move away from the U.S. dollar. In an FT Op-Ed, Michael wrote that every generation we…

The Vickers report came out in Britain identifying areas where Britain's banking system needed to alter its regulatory structure. Simon Johnson talked to Bloomberg about this report and banking regulation in general. His view is that first…

This topic needs a lot more attention. And I think today's so-called Bretton Woods II fiat system is unstable. Excess money creation and trade imbalances are secular problems that fiat currency has allowed to become destabilizing. If…

I would argue that inflation expectations are rising as we speak. They are still anchored but they will not be if they continue to rise any more. And if inflation expectations become unanchored, it will mean that policy tightening will have…

I was on the Max Keiser show talking to Max about precious metals, currency debasement and hyperinflation. Max was pushing the view that the U.S. was on its way to hyperinflation due to its reckless monetary policy. I argued against this…

I was on Business News Network with Rob Cox of Reuters Breakingviews yesterday. We were talking to Howard Green about all things economic. The video clip is linked below. But let me say a few words about the discussion. One of the two…

Since the financial crisis hit in 2008, excess reserves have piled up in the U.S. financial system. There were almost no excess reserves in the system during the period of recorded data from 1959 onwards. But after the post-Lehman…