Tuesday, 2 September 2014

All Change On The Money Go Round

On the whole linking and reading items that are succinct, not too technical and which can be more or less explained correctly to others is preferred.  But some material out there is challenging, especially about economics and money.

At Lindau in Bavaria, still in Germany, there has been a grand assembly of economists to discuss the their sciences, which some argue is not science.  Frances Coppola was there and is commenting on items for Forbes.

This article on monetary liquidity in "Forbes" is not easy and has inherent difficulties despite her effort to keep it clear.  It says that in the last few years there has been a major change in money creation and how liquid it has become.  The obvious problems for monetary policy are suggested.

In my view simply rewriting previous economic theory is not enough and governments and central banks are faced with key changes that impact on policy and control.

Because of new technology, structures, rapid communication and action, new financial products and crucial changes in how money and finance work and changed forms of money; it is not just a matter of technicalities and organisation but is far more radical in its effects.

It brings to mind the early 19th Century when horse drawn transport and sail were supplanted by steam and then oil and in financial terms later when bullion and free markets gave way to fiat currency and the state.

It could be that we have entered a new monetary world and this is going to change everything.

One thing will be the ability of governments to govern.

1 comment:

  1. I think we have entered a new monetary world but I'm not at all sure who the best guides are.