Hello. I’m Burnham Banks and I studied economics in the late 80s and early 90s. I’m still studying economics today and am still no wiser. This blog is a journal, a record of my thoughts and experiences. If we are destined to repeat our mistakes, we should at least repeat them faithfully. If not, then perhaps the past is a mischievous guide and we should try something new.
Inflation and Interest Rates Positively Correlated. Low Interest Rates and Slow Wage Growth.
Tuesday, 25 July 2017 | 3:31 pm
The ideal conditions for a country with a large national debt is high inflation. Inflation is a threat to purchasing power and can drive interest rates and debt service higher. Ideally therefore, what a highly indebted nation requires is high asset price inflation, and low consumer price inflation. These are the prevailing conditions in the
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Bond Market Versus Banks. Financial Plumbing, Policy and Regulation
Monday, 24 July 2017 | 8:24 am
The banking system is the plumbing of the economy. The past 7 years have seen this plumbing system undergo extensive repair works. While repair and upgrading works are ongoing, capacity has to be turned down and alternative infrastructure employed. Regulators like the Fed have to ensure that such alternative infrastructure is created or supported. The
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Imbalance Sheets: US Debt and Fed Policy
Thursday, 06 July 2017 | 4:25 pm
The current public debt levels in the US have risen from 60% of GDP to over 100% since 2008. World War II saw public debt levels rise from 45% to 120%. The latest crisis control has cost the US government half of the cost of WWII. US Federal Debt as % of GDP: 2008 bailouts
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Make Britain Great Again.
Tuesday, 04 July 2017 | 8:27 am
It is very hard to optimistic about anything about Britain. The people are divided, quite evenly, between those who wanted to stay in the EU and those who would leave it. A referendum has effectively documented this fact. The decision was taken without a thorough understanding of the consequences of leaving the EU, as various
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Brexit A Year On. No Clear Mandate. The Need For A New Unity.
Thursday, 29 June 2017 | 6:15 pm
I am neither British nor European, so I may not understand the historical and cultural context of Brexit. However, as an external observer, I can see great difficulties ahead for Britain, some of which I believe will be nearly impossible to resolve. The UK voted to leave the EU by a vote of 52% for
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