Neil Wilson — A Sterling Performance

Why you can ignore most of what is written about floating rate currencies and why the commentariat always gets it wrong.

As long as banks supply liquidity to speculators, speculators can dominate markets. In external trade, as long a central banks provide liquidity to speculators, speculators can dominate international markets.

Currency is a policy tool and the government is the monopoly issuer through its central bank.

Yes, this implies that so-called capitalist free market economies are actually command systems. Central banks chose the policy to follow in any case, although they usually strive to create an illusion that the market is setting prices through competition. Even in setting interest rates, they are supposedly "following market expectations" rather than setting policy. Even Paul Krugman believes this.

Modern Money Matters
A Sterling Performance

Neil Wilson

Winterspeak — What price is wrong?

My question is, suppose what's wrong is that there are insufficient Net Financial Assets (Equity) to supply the demand for private sector savings (broadly, and precisely defined)? In this model, the extra required savings, at the sector level, aren't available for any price and so the market doesn't clear. Deflation doesn't help, because it makes real debt burdens worse, and low interest rates don't help because ameliorate and exacerbate the issue at the same time.

Winterspeak
What price is wrong?