USA: What the hell’s the presidency for?
December 14, 2020Though it has of course been dismissed, the legal action led by seventeen US states joining ranks with Texas to try to invalidate the election of Joseph Biden at the Supreme Court is no less dangerous and toxic to the country’s democracy thanks to the uproar it has created. There are also about 130…
Inequalities are an inevitability but the truth is a right
December 5, 2020More jobs will be lost. More businesses will go bust. More people will slip into precariousness. More children will go hungry. Let’s not kid ourselves about the exorbitant economic cost of the crisis to come. Also, the people must know what to prepare themselves for and they deserve clear explanations from their governments. They…
My economic testament
November 10, 2020In my book, Le testament d’un économiste désabusé [Testament of a disillusioned economist], that is in fact a glossary of economies in crisis, you will not find under the letter C the term ‘Coronavirus’, nor the economic and social consequences of this health crisis or of its management by our authorities. While this ‘testament’…
2020: end of the “modern” world
November 3, 2020The collapse of the Weimar Republic was a turning point in European, even world, history. It must serve as a lesson, even almost a century on. We should indeed not forget that Chancellor Brüning – with the Great Depression in full swing – reduced public spending by more than 15 GDP percentage points, lowered…
You are all Charles Ponzi!
October 27, 2020“Give Ponzi a million”, the Wall Street Journal declared in an article on 2nd August 1920, “and in a twelve month he will expand it for you to some $25,000,000; in two years to $657,000,000; in three years to $16,885,000,000. Surely the Allies could spare him a million, and within three years clean up…
Taking on debt, yes, but what for?
October 11, 2020Following on from Keynes, it’s been years that I’ve been talking about it and outlining the mechanisms. At present, reality is catching up with the “mainstream” economists who with regret have recognised the absolute necessity for governments to deepen their debts in the current recession brought about by the health crisis. However, while the leaders…
Smile, you’re being watched
September 29, 2020My readers know that I am an advocate of the phasing out of cash, for macroeconomic reasons outlined across several articles and books. To summarise, negative rates – that we will inevitably see – will only be effective if cash is eradicated, because a world without cash would also be a world without recession. I…
The most important job in the world?
September 17, 2020The most coveted job in the world is that of the central banker, who also arouses the hastiest of judgments, all over them like a rash, and sometimes even hate-filled. Vilified for exacerbating inequalities and dragged through the mud for maintaining zero interest rates, it’s only fair that we don’t try to claim bankers…
Economists on the verge of nervous breakdown
September 9, 2020Central banks are lost, and central bankers are now blatantly admitting that their tools and other monetary policy instruments used for decades to correct economic cycles no longer work! Yes: they have lost their magic touch, these central banks which are no longer omnipotent, including the most powerful of them, namely the US Federal…
Japan: a sleeping beauty
September 1, 2020On the macroeconomic scale, Japan is a laboratory, but it’s also a cemetery where economists and theorists have had to bury their certainties. I salute the determination of Prime Minister Abe on his departure, having not shied away from any decision or measure in pulling his country out of the lethargy that it has…
There is life outside of work
August 28, 2020The time when Voltaire stated in Candide that “Work saves us from three great evils: boredom, vice and need” is over. Today, it is no longer appropriate to work regardless of the cost. In other words, less work could improve our living conditions and could undoubtedly improve the way we do work. The belief…
The real power, the one that counts: that of the new monarchs
August 24, 2020The share values of Apple, Amazon, Alphabet, Microsoft and Facebook – that are also the 5 largest capitalisations in the US – have climbed by 40% this year, while all other so-called “traditional” shares listed on the S&P 500 index are unchanged over this same period. For more than 70 years such a concentration…
The other major consequence of the Coronavirus!
July 28, 2020Covid-19 has caused a run on cash, at least from the moment that the fears started to grip our Western societies. Intuitively, it is however the opposite of what we might have imagined. Weren’t there fears – albeit justified – that the illness could be transmitted by certain objects? Isn’t this why there…
The duty of financial intervention
July 16, 2020Might international finance be supporting and facilitating the work of dictators and autocrats? It is in fact not a lack of funding that could, for example, depose Jacob Zuma in South Africa, but rather his own party being put under intense pressure by a population that is wrought with wide-scale corruption orchestrated by Zuma…
Working 4 days to work better
June 30, 2020After the health crisis – and even while it still looms over us – the 4-day work week will undeniably be a viable path to take to rebuild economies. However, our Western societies don’t have – or rather no longer have – the means to put it in place. Since the great financial crisis…
May this crisis be an opportunity!
June 15, 2020For the common good, but also purely and simply for the preservation of capitalism, this crisis must be got to grips with because the cause and effect relationship between the accumulation of debt and inequalities is, for me, at the source of it all. The fact is that the drop in debt for the…
700 years of interest rates to predict the future
June 8, 2020The bankers of Florence – the inventors of modern finance –imposed a two-figure interest rate in return for their loans. The usurer Shylock, in Shakespeare’s The Merchant of Venice, was happy with 8%, whereas this service charge on debt had fallen to around 4% at the start of World War One, and is now at…
Austerity is not an inevitability !
May 18, 2020You are greatly mistaken if you think Europe’s woes to come will be caused by a liquidity crisis. It is in fact a solvency crisis that poses an imminent threat to many members of the Union who don’t really need their funding costs to decrease, but who are desperately in search of transfers and…
This might not be a crisis!
May 9, 2020The comparison between the Covid-19-stamped economic crisis and the 2007-2008 crisis is fascinating. Do you remember: at the time, the real economy was suffering the direct consequences of an overindebted banking system that made heavy use of leverage. Faced with this existential threat, the response was rather classic, in that it consisted of creating…
The Monetary Theory of Happiness
April 29, 2020A government that puts its monetary system to the service of its citizens and businesses views money as an instrument to improve their prosperity. In the absence of this belief, government action is ineffective or effective for just a minority. This degenerates into “poverty in the midst of plenty” to quote Keynes, who illustrated…
The death of money, as you once knew it
April 21, 2020I’ve been saying it for years: the use of cash is on its way out and the Coronavirus will be the final nail in its coffin. There’s no point in fighting against an inevitable phenomenon because the use of banknotes will more or less have disappeared from our intertwined economies – including China –…
Covid-China-19: we will not forget
April 15, 2020It is the efforts made towards China by what is called the global community that allowed the country, over a few decades, to successfully implement its reforms. The normalisation of relations between the US and China, inaugurated in 1979 by President Carter, was in fact the starting point of an open relationship of reformatory…
The consequences of coronavirus for dummies in economics and finance
April 14, 2020Michel Santi, Michel, I have known you for a long time. You are a financier, an economist, an entrepreneur,a visionary. I always thought you were an unconventional and fascinating person. Despite not understanding much, I always felt a different voice in you, as show your eight publications, seven of which on economics and finance,…
Turning the tables after the virus
March 23, 2020Thanks to this crisis, our duty is to rebuild society on a solid basis, as well as making deep reforms to financial markets and getting rid once and for all of their intrinsic ability to cause harm. Because, once again and in quite the same vein, the economic and financial crash that is unfolding…
The testament of a disillusioned economist
March 17, 2020This is my testament. My economic testimony. It’s been 12 years now that I’ve been analysing the crisis. All in all, I’ve been writing about the economy and finance for thirty years. However, it’s from 2007 that I’ve been trying tirelessly, through my books and my articles, to denounce what has come to be…
Oil: what a brutal world!
March 9, 2020We are living in turbulent times and our world can attest, since a few days ago, to the equivalent of a declaration of war taking place on the oil market. Saudi Arabia, that is suffering a fall of more than 20% of its exports to China (its biggest client) due to the coronavirus epidemic,…
We, the barbarians
March 2, 2020Economic science is up for the chop, and the profession has been put on the defensive. Those who imposed austerity during the last great crisis called on what they thought made up the fundamentals of the economy. The rare ones who rejected this stringency pleaded, for their part, for action in this discipline that…
The Saudi/US pact: reflection of a vulnerable America
February 17, 2020The US is made a distant comeback. Its dollar was, at the start of the 1970s, in a precarious situation due to the exorbitant cost of the Vietnam war and the various social programmes whose combined effects meant the country could no longer maintain the parity with gold that was established in 1944 at…
Keynes to the rescue for Lebanon
February 7, 2020When all is said and done, bankruptcy is nothing more than an accounting phenomenon, and growth is a matter of confidence. Otherwise, why would the Bank of Japan be the sole proprietor of half of its national bond market and why are its holdings in bonds and shares in the country reaching 100% of…
Brexit: the irreversible decline of a proud nation
January 31, 2020This 31st January 2020 will be known for a rolling back of freedoms, as Brexit tells above all the story of closure, a victory – not by KO but on points – for the partisans of a Great Britain that is revising its ambitions considerably downwards. Without it, the European Union will still count…
This Japan that won’t stop surprising us
January 24, 2020Japan has been able to face up to its destiny, and even to force it. It has handled perfectly one of the essential components of economic growth, that being demographics. In fact, the number of people on the payroll has increased there these last ten years, much more than in any other developed economy.…
Sanctions are testaments of American supremacy
January 14, 2020Contrary to popular belief, it’s not the weapon of the dollar that makes US sanctions against a country inescapable. The Greenback is of course the reserve currency par excellence on the global scale and naturally accounts for the American hegemony. However, doing business in another currency – for the many companies and nations under…
Germany is drowning in its ordoliberalism
December 31, 2019Do the Germans, who in their overwhelming majority are staunchly opposed to what they call the “Haftungsunion”, also known as transfer union implying that their country pays too much money into Europe, live in a parallel universe? Might the Germans have become populist in that they don’t hesitate to dig up a specious, fallacious, facile…
If only we were all Japanese!
December 12, 2019The economists and bankers of my generation have had the habit of entertaining themselves by dividing the world into four types of economies: developed, emerging, Argentina and Japan. It is worth, however, updating this somewhat simplistic and caricatural joke by removing Japan from the list of economic aberrations. Albeit highly unlikely, the Japanese property…
The Gospel according to Saint Money
November 30, 2019It’s a history condemned to repeat itself forever because, since the dawn of time, the enrichment of some has basically always been to the detriment of others. Inequality has often been described by the upper class as an inevitable side effect, systemic almost, of the prosperity and innovation that is however meant to benefit…
Lebanon: a new race of leaders
November 20, 2019To understand the events in Lebanon that have taken place over the last month, it is vital to have an idea of the country’s debt structure. In other words: the analysis of Lebanon’s public and private debt allows us to better understand this socioeconomic crisis. In fact, Lebanon is renowned for distinguishing itself…
Work is a perished good
November 13, 2019Full time work for a fixed salary has only existed for around a hundred years, and still not for everyone, as women were deprived of it for a good while, including during the happy times of full employment in the second half of last century. Today, deregulation, outsourcing and automation are all synonymous with…
Negative rates: an economic curse?
November 6, 2019Companies that don’t pay interests on their debt are a like these students who never sit an exam: they somehow scrape by without any notable successes or accomplishments. The current level of rates should be encouraging investment because companies’ margins are much higher than the cost of capital, that is itself negligible. Even the…
Economists: can we trust them?
October 28, 2019Chile is the only Latin American country that is a member of the OECD, and not long ago it was still being cited as an example to follow because of its success and economic recovery. It is, however, just the latest victim to date of a neoliberalism whose ravages have now become universal. Chile’s fall…
Inflation of prices, deflation of policies
October 10, 2019So you think you understand inflation? Allow me to correct you because it is in no way the result of an unreasonable expansion of the money supply that translates into a rise in prices. This clichéd term of “inflation”, used unscrupulously by the detractors of central banks, by the prophets of misfortune whose commercial stock…
Lebanon: how can it avoid self-destruction?
October 1, 2019I just got back from Lebanon, a country that I know well and where I was born, where the atmosphere is now as palpable as it was during the dark days of the civil war. Admittedly, it’s not the armed conflicts that threaten, though this nation remains a hostage – often consentingly – to…
The economic deficiencies of our political leaders
September 17, 2019The “Japanisation” of our Western economies that I have been talking about and describing for years has now reached its climax with the world’s two most influential central banks – the ECB and the Fed – getting (back) out the heavy artillery in the hope of putting more pressure on their interest rates. The heated…
The People against the Economists
September 9, 2019In his time, Franklin Delano Roosevelt dismissed John Maynard Keynes, one of the most influential and brilliant economists of the 20th century, who was labelled an “unorthodox mathematician” by this president. In his farewell address, Eisenhower had warned his citizens against the technocrats in power, the same who were recently described by Emmanuel Macron…
Compliance, Banks in a changing world
September 3, 2019The rise to power of compliance departments in banks can be explained by the fines imposed by regulators and Western, mainly American, judiciaries. After the 9/11 attacks, after the “Patriot Act”, and after the US sanctions on Iran, Russia, certain Mexican agents and anyone who the US unilaterally and in an instant decries as…
Italy: how to decimate a country in less than 20 years
July 26, 2019In 1960, Italy’s GDP was 15% smaller than France’s, and 27% lower than the average of Germany, the Netherlands, Belgium and France’s combined. However, this country enjoyed steady growth until the start of the 1990s as Italian household income caught up with the period’s norm for the other eurozone nations, so much so that…
Central banker: extinction of the species
July 9, 2019“Of course our central bank is independent”, the Turkish President, Recep Tayyip Erdogan, pretty much just declared, just before dismissing by presidential decree (on 7th July) the boss of Turkey’s central bank, Murat Cetinkaya, stating that “a central bank cannot ignore the signals sent by the President”. It was in the last century and…
Have populists become conservatives ?
June 29, 2019There was a time when “populism” was synonymous with governmental financial mismanagement and irresponsibility. Far exceeding budget constraints, the leaders of these groups and realms of thought would empty the public treasury, use up reserves and bring about monetary crises, inflation, capital outflows, recession and even payment defaults. In short, the reigning populists’ disdain…
Finance: at the heart of the climate emergency
June 18, 2019The UK is hoping to achieve climate neutrality by 2050. However, one of the important drivers that will help overcome the greatest challenge of our time – climate change – is outside governmental control. A nation cannot claim to be substantially reducing its greenhouse emissions without first regulating the flow of liquidity channelled towards…
The Monetary Theory (MMT) that has nothing Modern about it
June 11, 2019I’ve been writing it since 2010. I’ve released several books and hundreds of articles meticulously defending the position. Sovereign States – that being those who issue their own currency independently of any indexation – should learn to love, or at the very least live with, their public deficits. Because a nation that controls its…
China is quietly quaking in its boots
June 5, 2019Is China on the brink of a crisis similar to the one suffered last year by Argentina, due to a defective balance of payments? In such a situation, China would see itself short on dollars, unable to support its own currency! As for many other sovereign nations, the Yuan is built on its country’s…