24th October, 2008
The NS has published a short piece this week: “Economists simply would not accept that their model could fail“. An introductory sentence is not mine: “Who would have predicted..that prudent Gordon Brown (would) breach the EU cap on government spending?” Am writing to the NS to ask for a correction to be published.
The World Tonight, Monday 14th October, 2008, 10.38pm.
12th October, 2008.
The news that Britain’s local authorities may have lost up to a £1 billion in the collapse of Iceland’s banks beggars belief. The competence of their highly paid chief executives must surely be challenged, and powers to borrow on international capital markets curtailed.
11th October, 2008.
I have had an extraordinary day today, at an event in Bristol organised by the Schumacher Society. Fritz Schumacher - of Small is Beautiful fame - died in 1977, and the Society was formed just thirty years ago, in 1978. Today’s event was hosted by Diana Schumacher and Jonathon Porritt. I was honoured to share a platform with Bill McKibben the great leader of the Green movement in the United States, and brilliant strategist behind the 350 campaign.
Sunday 5th October, 2008
The decision tonight by Germany to guarantee 100% of all savings in German banks first flagged up by the BBC earlier this Sunday evening, but modified later, is a clear signal that there is panic afoot. A run on German banks must be imminent. Why? Because the only way to prevent a run on banks is to guarantee 100% of savings. The fact that Germany has done so, or hinted that she will do so, means that her government is taking urgent, unprecedented and unco-ordinated action, to prevent such a financial catastrophe occurring tomorrow morning. Others must now follow to prevent a systemic run on the global banking system. To avoid armageddon.
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Tuesday 30th September, 2008.
Sir, Your editorial “In praise of free markets” (September 27/28) conflates regulation of trade markets with that of financial markets.
This is a flawed analysis, one at the core of most economic orthodoxy – that money, like land, oil, soya beans, diamonds or gold, is a commodity, and therefore that trade and markets in money are no different from markets in, say, soya beans.
In this big bad world of the Credit Crunch, powerful central bankers - civil servants all - have bent over backwards to help powerful and rich private bankers.
On one day, ‘debtonation day’, central bankers in Europe and the US pumped an eye-watering $150 billion into the financial system, to keep big banks afloat. According to Bloomberg, the US’s Federal reserve has ‘cycled $2.58 trillion through U.S. money markets since December’. (Bloomberg 8th August, 2008).
We trust Central Bank governors. They are after all, civil servants - not masters of the universe - there to serve the citizenry, not just the finance sector. And they are charged to act as ‘guardians of the nation’s finances’.
So when the deputy governor of the Bank of England says in a report on the nation’s financial stability on the 1st May, 2008 that: “the most likely path ahead is that confidence and risk appetite will return gradually in the coming months” we are inclined to believe him. His comforting words were echoed by that American civil servant and central bank governor of the Federal Reserve, Ben Bernanke, who said in a speech on 9th June, 2008 that “although activity during the current quarter is likely to be weak, the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.”
But then a cautious citizen turns to Page 27 of the Financial Times of 14th June, and reads that European banks have a $400 bn hole on their balance sheets, in spite of raising a great deal of money from the capital markets this last week. Furthermore there are fears of another American bank failure - Lehman brothers - ‘a dead bank walking’ according to critics quoted in the FT on 14th June.
A cautious citizen would extrapolate from this first, that confidence is unlikely to return; second, that risks have not diminished over the past month or so. Third, that therefore our public servants are either a) deluded or b) unaware of the state of banks’ balance sheets.
This could cause a cautious citizen to lose confidence in the pronouncements of central bankers.
A response to the "Triple Crunch" of financial crisis, climate change and oil depletion. Read the report published by the Green New Deal Group and nef (new economics foundation).
Welcome to my blog about the financial crisis. I'm Ann Pettifor, author and analyst of the global financial system, and co-author of the Green New Deal. I predicted an Anglo-American debt-deflationary crisis back in 2003, and am known for my work on sovereign debt and international finance, including Jubilee 2000. Currently a fellow of the new economics foundation and director of Advocacy International.