YouSaid · the spoken record

Helen Thompson

lines on the record: 70
first: 2023-10-16
most recent: 2023-10-16
sittings or episodes: 1
sources: podcast

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“There is now a risk that we could get into a situation that would be not dissimilar in the sense of if Israel is in a war only against Hamas but potentially bringing in Lebanon, even Syria, I didn't manage to see all the things I was teaching earlier today, but I think I saw something about Damascus Airport in what I'd seen. I might have got that role. But it's not in that context of several wars involving Israel difficult to see how we might get. Number of the Arab states and Iran using energy exports as a geopolitical weapon. And that obviously is dangerous in itself and would have a lot of economic and political repercussions for the rest of the world.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Around the Taiwan question that in some sense one side has to think about the issue in a different way. And I don't see any evidence that that's what's happening. So I think that in terms of the Middle East, we've obviously entered into a new period of this extraordinarily dangerous. If we go back to the 1970s, we can see how the geopolitical conflicts of the Middle East, not just around Israel against Palestinians, but also Iran's position within the region spills over into serious economic problems around energy. And then that spills over into political issues of political problems. Generated by inflation in particular. So I think that”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Whatever the level of intent there is in Beijing, if peaceful unification doesn't arrive to use war in order to take Taiwan, it's also, I think, a question of like how the American, how the United States responds if China is able to achieve peaceful unification. Is the United States going to accept that politicians in Washington willing to accept that with the consequences that it has that that has in terms of Taiwan's position in the world economy in relation to advanced chips and in relation to the American naval position in the Pacific? So I think that at the moment there aren't really”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Politicians in Washington about what made in China 2025 and China's ambitions around the energy transition would mean for the United States geopolitically and that that fear that actually as we changed energy regime that the geopolitical world would change with it in the same way in which that transition energy wise from coal to oil I mean it's not a change because you're adding oil to coal rather than replacing but it's central to the demise of British power and the rise of American power so the idea that you can then take climate change as a kind of like okay this is the safe area of cooperation when actually it's tied to something that's at the heart of the geopolitical competition between the United States and China I think the Taiwan question is really worrying because it isn't just really a question of”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“I mean, I think both of them are really pretty dangerous situations. I think you can see on US China that the Biden administration came in with the hope that you could combine a get tough in some areas, get very tough in some areas like semiconductor chips, whilst being very open to cooperation in others, most obviously climate change. But I think that that was always like wishful thinking, to be honest from the start. And I think one of the problems here is that the one where the US got the most desire for cooperation, climate change, is really ultimately about the energy transition. And that, how that plays out is going to be pretty central to how the geopolitical competition between the United States and China plays out. And partly it is clear that the fear of God was put into”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Yes, and the transition, the full transition from sterling to dollar required World War I, the Great Depression, and World War II. So when people make a prediction about the dollar is moving to some new monetary order, I say it takes lots of things to sort of fully enact that transition. And as you said, we have a sample size of one. So time is running short. I know you got to go, but let's quickly touch on geopolitics. How do you think U.S.-China relations evolve? What do you think the odds are of rapproachment versus an escalation as well as potential China, what China does with Taiwan? And then also I should say we're recording this on October 12th. And Hamas attack on Israel was less than a week ago. And Israel is a retired.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“And if you look at it, if you try to just, so I don't like generalizing from like one case, I mean, if you want to put it in those terms. But if you just do look at that case, the move from sterling to the dollar, then it's clearly fundamentally bound up with the First World War in the first instance. And the fact that Britain moved from being such a big creditor to being large debtor in a relatively short period, really rather short period of time because of a world war. So you can't take out the Geopolitical Context out of that change. So just doing it in terms of kind of like a monetary and financial perspective, it just doesn't really work. So I think in that sense, until we got a clearer idea, like where the geopolitics of the world is going, it's quite difficult to see if we're going to use that as a basis for past cases.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“In terms of if we really try projected a bit further into the future, the reason why we get is such a hard question to think about is because there's only this one previous transition, if you like, to think about, really. The only one that it is only stirring into the dollar as the International Reserve currency. And then within the period in which the dollar's been the reserve currency, we ended the backing of gold for the American currency. So if we try to project from history and look at patterns, there's nothing really I think to look at.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Like Saudi Arabia, clearly wants options generally in what they see of as the emerging multipolar world, very willing to play it both ways where China and the United States is concerned. But when it comes to what the Chinese, sorry, what the Saudis have been purchasing, they'd rather buy European football clubs than they'll be making financial investments in China. So I think that that tells something about the limits of the idea that there's kind of a cohesion of the bricks into an anti-dollar block. Now, that doesn't mean there might not be incentivized to do that. They might not have the desire. In the world as it actually is, I think the incentives don't lie from moving away from the dollar.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“First of all, I'm not somebody who's very convinced that de-dolarization is happening very significantly or likely to happen like very significantly. American financial military power is still very considerable. I don't think you can just read off like weakness in American military power or American diplomatic weakness in the Middle East or even the fact that the American energy power is probably not going to be in 10 years time what it was in the middle of the 2010s and say that that means that there's such an overall decline in American power that financial and monetary power go down with it. I don't think it works like that. I think that the dollar is far too central to the world economy still that China on the credit side in particular the U dollar system and I think on the case of China it's very difficult to see how you can think about how in the Chinese currency replacing the dollar when the kind of capital controls that China has in place. If you look at”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“And so I'm not going to ask you the possible question of when will the monetary order change? When will the baton be passed because it's impossible to answer no one knows that? But do you have a view on if and when it passed, even if it is in 800 years, the dollar, as we know it today, who will that baton pass it to? Will it be another fiat currency, some thought the euro, some thoughts the Chinese yuan, the renminbi? Or will it be some sort of globalized central bank digital currency, a CBDC? Will there be no monetary hegemon at all to use a Kindleberger phrase? Or will it be a return to gold or a hard money such as Bitcoin, which is certainly not my case case, but I just want to provide you all the available opportunities or an alternative that I did not think of or say.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Well, some of that obviously did go all. I mean, in that sense, you could say that there was the fact if we're going to allow that as kind of like sort of a form of capital controls. There was some of that, I think, that went on in the Eurozone crisis at a certain point. I mean, I think that some of the measures that the European Central Bank introduced in 2011, 12 in particular had the effect of strongly incentivizing the purchase of domestic debt over non, particularly in Italy. Over foreign debt. So, yeah”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“At some point around the, I think build up to Nixon ending dollar gold convertibility where the West Germans end up trying to ban international telephone calls to try to make their capital controls. We're not in that and I'm not even sure that that was very successful then but I think that's also in the space of the unknowns that we don't that we that we don't know. I mean on the one hand as to say for reasons I think that you and I might agree on we can see a possible trajectory going forward that financial repression is part of it. I don't think you can separate that question from the energy revolution. And at the same time, it's very difficult to see how financial repression works in the financial side of the world economy that we know today.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“And I think that it's pretty difficult to see how, for the reasons that Keynes articulated a number of times around the Bretton Woods conference and in some of his work before that, how you can think that they can be effective political control over interest rates. And that's what ultimately then we're talking about financial repression without engaging in capital, using capital controls. Now, that obviously then raises a big question, which you've kind of already got at, Jack, is it's like, well, what on earth capital would contribute to controls mean in the world economy of the 21st century? They were already pretty difficult to operate, even in the earlier years of Bretton Mill, certainly by the time the UAL markets were going out of London and from the late 1950s. I remember there's one point, I think it's in 19.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“1931, 1933, whenever you want to end the gold standard, and then the bread and woods period. And it's very clear that financial repression, which is obviously a premise of the Bretton Woods order, went hand in hand with the formal right of states to use capital controls and the willingness not only of European states to do that, but by the 1960s the United States itself using capital controls. And I think the world economically and politically changed then in the 70s from 74 onwards when the Nixon administration began removing the last control, removed the last controls the United States had. And then when Margaret Thatcher's government came in in the UK in 1979, Became the first European state to remove villain, and so it went on”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Not so hung up like really precise definitions of these economic policy terms, I'd be happy with the way in which you defined that. But I think that, as you say, that the crucial question then becomes whether it's possible to do it without capital controls. I mean, I spent quite a bit of time, various things that I've done in my academic career, looking at the relationship between democratic politics and open capital flows, both during the periods when they had been there, so say 19. That the interwar gold standard 1924.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“And could you give a somewhat academic and rigorous definition of financial repression? I suppose the common one is just keeping interest rates lower than inflation so that holders of debt are inflated away and debased day by day. What is the sort of a textbook definition of financial repression? And then how is it enforced and might require capital controls? Because if Europe does financial repression and no one else does, guess what? Money's coming to the US. So it kind of has to be, you have to keep the money there for it to be debased, right?”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“I think that as so long as the energy revolution is given the priority that's being given that the monetary and financial world will have to adjust, will end up adjusting to that.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“This trust's demise was around the pension funds that I think is another, it is a potential at least another point of vulnerability. I wouldn't be at all surprised if in the medium term, and I don't really want to say when I think the medium term would be beginning, that we don't head in direction of some financial repression. And that I think that One of the reasons for that goes back to the energy revolution question is I think it really is dubious whether we could even be thinking about doing this in an era of even just moderately high interest rates. The whole premise I think of net zero politics is it gets called in Europe anyway was the cheap money, cheap monetary environment.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“The question of whether it's possible to keep going on like this, if you see what I mean, but I think that there's still sufficient consistencies within the Eurozone, perhaps particularly in Germany, that's not convinced that we've now moved into an entirely new era where we just say actually debt and more debt as a way of dealing with these economic and economic and political problems.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“The show got back on the road again. So you can say, which I would probably say, well, one day it won't be possible to get the show back on the road again because everything has its limits. I mean, everything alive has its limits. But who the hell knows when that? I mean, like, who, I mean, given everything that we've seen since 2008, I think it would be actually utterly foolish to think, okay, next time it will be the time when it's over. It's over for good. I mean, I think you can see, I think where you'll see strains is that as the costs of servicing the debt become greater, particularly I think in the Eurozone, that you will see some like political pressure to say, can we keep going on like this? Now, that I think will be in a way independent of”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“I think the first thing is Jack, that you're right, is saying that every time you think that there might be an end game for this, it doesn't turn out to be like that. I mean, think back to like March of 2020. I think that lots of people have forgotten already in a way what a big financial market shock that that was initially. It's just because it was over very quickly in a matter of weeks. But if you look at the depth of the multiple crisis in play in like financial markets is comparable, I think, to what happened in 2008. And there was some sense, I think, that, look, all the bubble, let's just call it that, had gone on post-2008, finally burst and there really were limits. But QE infinity. Got the thing and dollar swaps, got the show back on the”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“If we get to that tipping point, I mean, are you going to see weaknesses in currencies? How would you see that if the dollar weakens, but then the euro also weakens, then neither of them weaken against each other? How do you think this evolves?”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Yes, and a lot of people talk about an end game, a macro endgame of how this would end. One, a situation is devaluation of fiat currencies, in which case, you know, gold and Bitcoin would do really well. Another way is, I guess that's also financial repression where you keep interest rates much lower than inflation, which might require capital controls, which is interesting. You know, the 1940s financial world was very different than it is currently. The second is debt reduction, and I guess the third is a debt jubilee. But fourth, I suppose, is business as usual. Tuesday will just be like Monday. How do you think of virus? Of course, we have both, no, there's never an end game. The game never ends. But how do you think this ends? Sorry, sorry, how do you think this evolves?”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Time, not much bounce in the last part of the 80s, but in the 90s, you would have been gulpsmacked. It would have been possible for governments to use debt in that way, but it turned out that it was. And then when you throw in the fact that governments across the world are committed to essentially an energy revolution, I don't think it's an energy transition, it's an energy revolution tempting essentially to reconfigure the entire energy basis of like modern industrial civilization. The only way that that can be done in terms of the amount of investment that it requires and the incentives the private sector need it, invest in what the state itself needs to do is going to be through debt. So we're going to keep testing, I think, how far we can go without debt becoming either a macroeconomic problem or a political problem. I think there's lots of space that we're still in.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“So I think that those days, if you like, in the 80s and the 90s, where the rules of bond markets and foreign exchange markets were relatively light well understood, there was this space where you went, don't be like Mito in his early years, don't let the pound head below such whatever level it might be. I don't think that I don't think that there's a common set of understandings now about where the limits lie because clearly the limits are radically different than what they were in the pre quantity of easing world. If you'd said like in 2002 even, let alone in the middle of the 90s or the late 80s, that governments would have been able to just use debt to deal with the pandemic and shut down the world economy for several months. I think, I mean, I had some level of consciousness about these questions at the time.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“And so the argument then was like it's all feeding through the pension system that the system can't cope any longer with interest rates at that level. And they couldn't at that moment, but now they kind of can. And I think that this is really where we're in this kind of like unknown territory. And if you go back to, I think, the summer of 2022, so before this trust was even in power, still in the UK like Boris Johnson, there was a lot of talk. I remember writing some of these things myself about that nobody really knew how far that the Fed could raise rates and other central banks, not the bank of Japan, but others have to follow without rates reaching the level that would cause financial deep financial market instability indeed at a systemic way. Yet they went beyond what many people perhaps including myself, I think I would include myself in that thought was a dangerous level where financial markets were concerned.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Debt that matter a lot and that we don't really know what the level of interest rates for states financing debt matter are. If you take like what happened to the Liz Truss government in the UK last autumn, a whole set of things went into motion, if you like, around that when the budget that her and her chancellor put forward pushed the bond yields over for essentially over long term, so 10 years over four. And that put a lot of pressure on sterling and those two problems essentially did for that government. But British bond yields are back up above that level now. And it's not destabilizing in the same way.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“I don't think it's just a matter of inflation. I think that debt does matter and that debt almost always has like distributive consequences. I think that what we've lived through, though, in the post-Crash world is a rather a recalibration of the levels of debt that advanced economy states can sustain without really having to worry too much. About it in bond markets or for European countries, in particular in foreign exchange markets. Now, I'm not of the view, I think, that There is no constraint here any longer that we've simply moved into a world where debt doesn't matter. I think we've more moved into a world where”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“What's the word? A social democrat government that has a somewhat generous welfare system would have a large fiscal deficit and then the conservative one would not. But the US in particular and a lot of governments sovereign debt has increased. Although interestingly, private debt is a much more complicated story. So I'm not saying that all levels of debt have exploded higher, but sovereign debt as a percentage of GDP, particularly in the US, is very high. Does that change any of the political economic calculus in terms of redistribution, in terms of how much the Federal Reserve can hike interest rates or keep them high or keep reducing its balance sheets? What is different now that the US GDP is a much higher percentage of SP as opposed to”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“How do you think about sovereign debt levels as a political economist? You think a lot about inequality. You talk about the aristocratic excesses of privatization in the 1980s. I guess a very superficial lens would be a”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“The Fed raising rates and causing issues for what then developing countries now, emerging markets. I could think you can see bits of it in what happened last year. I mean, I agree with you that we haven't had like spectacular cases. We've not had something that looks like Mexico in 90 or not anything of the size of Mexico at least. It looks like Mexico in 1982. Or as you say, in terms of just sheer currency crisis, what happened to the Asian financial crisis in 1997, 98. But I don't think that the underlying, if you like, structural dynamics of this are so different in the sense I wouldn't be too optimistic that there aren't plenty of issues around emerging market. Debt and currencies ahead. I mean, I'm not saying that there necessarily will be either. I'm just saying I don't think we're out of this”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, I think you can see some countries where the conjunction of events last year between the Fed raising rates, the energy situation. And indeed, sometimes climate related events, the flooding, I'm thinking particularly of Pakistan here, where the cumulative effect of it all. On currency, weakening currency, issues with whether debt can be repaid or not, need for IMF credit, that some of those older patterns where we would expect from the 80s where you have”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“The most violent cough since 1980 or 81. And in terms of going from zero to 5.25 or 5.5%. And so far, everything seems so fine so far. And China has its own issues. But to my untrained eye, it seems like a lot of that is self-inflicted or policy as opposed to, oh, it's struggling because the Fed is raising rates.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“The saying that when the US catches the rest of the world catches a cold, when the Federal Reserve does a little bit of interest rate, it causes a disproportionate impact on other countries, particularly emerging market countries. And the example you cited of, oh, there's a rumor of a 25 basis point hike that put the Chinese property market into distress. And, oh, Bernanke makes a comment about we may do some tapering and suddenly some emerging market currency has a huge depreciation. Has the resilience of many merging market economies and markets and currencies surprised you? Do you have views on it? It's definitely surprised me. You know, you think back to what we just talked about, those examples, as well as 1997 in Thailand, it seems like emerging markets are somewhat stable and that the US, the Federal Reserve has issued”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Raise rates or not, you've got the prospect of that quarter of that year, which is the first rate increase since the crash. You've got even the prospect of that causing financial market havoc in China in 2015 that spilled over again early 2016 after the interest rate increase had made that summer, so summer 2015 now China was having to tighten its capital controls. It's quite hard, I think, to think about that kind of set of events happening in the pre-2008 world in quite the same way, certainly where China was concerned.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“So, what I'm trying to say is you couldn't say this is the ECB following what the Fed did in that period. I think the one that's really interesting in the 2010s, which shows it, shows the change, is really the China comparison. Because if you go back before 2008, you've got all that worry being expressed in all kinds of different ways. Think about what Lawrence Summers said about the balance of financial terror that actually Chinese purchase of US debt was a constraint on a number of aspects of American policy. And you might say that it was possible at times that the Fed had to bear that in mind, shall we say, when deciding whether to tighten interest rates on all or not. But you go on to 2015 and are saying that period when the Fed's talking under Janet Yellen about whether it's going to”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Great. If you look those, say, like 1987 around the time of the Louvre Accord, the Bundesbet was kind of really doing its own thing at that point in regard to the Fed. And then everybody else in the exchange rate mechanism was like having to deal with that. Now, I think if you then move on to the 2010s, the issue isn't perhaps Europe in the same way, the European Central Bank really did something rather different than the Fed in the 2008 to 2015 period. Because remember that the Fed didn't introduce quantitative easing until 2015. Now, what I meant was that the Fed”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Having to respond to what the Bundesbank did. So there you have a situation where I think one of the French central bankers at one point quipped that French monetary sovereignty lasted as long as it took Frankfurt to pick up the phone to Paris and tell them that they were changing interests.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Partly about how much discretion other states have or other central banks, I should say obviously, have in order or how much discretion they have to ignore the decisions that the Fed makes. So do they not have to put interest rates up when the Fed put interest rates up? Now, in some ways, I think if you go to Europe, this comparison, if you try and compare with the 1980s, it's quite hard to disentangle because you've got to add into the picture in the 80s in Europe, the West German Central Bank, the Bundesbank, and the European exchange rate mechanism as a monetary system that as a decade went on hard and such that it was in a way the response of the Fed to how the Bundesbout responded to what the Fed did and then everybody else in the exchange rate mechanism.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Now, you can say, which is obviously the case, that having a monetary response to that hardly fixes the problem. But at the same time, I think it's going to be something in that space happens, it's going to be an interesting question as to whether the central banks just say, well, we just have to absorb the inflation you hit because it's not really coming on monetary side. I think that might be hard. if we saw a really sharp increase in oil prices in the case of the United States and perhaps gas prices in the case of Europe. I mean, gas prices in the case of Europe.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Prices or even potentially even an embargo as a weapon in this conflict with Israel. So something more akin to what happened in October 1973 when the Arab members of OPEC decided both to increase the prices by about 400% effectively and embargoed the United States and the Netherlands.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“And 22, it may be coming back again. Now, I think if you think about that in terms of macroeconomic side, you might say there's already sufficient evidence that actually prices above $90 a barrel start crashing demand, that they basically destroy demand. And that might be true about China now as well. So in that sense, the inflation pressure will ease off that high prices actually just brings high prices down. The unknown, obviously, that now has to be put into thinking about this is whether there will be a geopolitical Shock coming out of the Middle East and whether that means whether you have one of the either oil or indeed perhaps gas producers like Qatar actually using”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“China in 2015, 2016, just on the prospect the Fed was going to raise interest rates by a quarter of a percent at the end of 2015. That's a quite notable increase in the influence of that the Fed has. I think the difficulty for the central banks now, and I wouldn't exempt the Fed from this, is that on the energy side, and we can see this in oil prices over the last six weeks perhaps, or so it's maybe slightly longer that the pressure is back upwards again, so that if energy was at the center of the inflationary shock of 2000 and late 2021 and into 2000, already the second half of 2021 and into 2000.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Some time and I spent quite some time in my book Disorder talking about the way in which American financial power, American monetary power, I think in some ways is greater than it's ever been before, whatever else is going on with American power in the world, let's say American military power in the Middle East. Actually, the crash in 2008, particularly the way in which the Federal Reserve Board had to act as essentially as a lender of last resort to the Eurodollar system and then became the provider of dollar swaps and choosing who dollar swaps were going to. And then being able to for financial, to see, I should say, to see its decisions, not even just sometimes its decisions, but its promises of making decisions caused financial market instability like in other countries. Think back to what happened in”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, on that question, I'll take that question first. I think that it's undoubtedly the case, not only that the Fed is the trendset if we could call it that setting the pace. And that's true actually on the way up on the way down because there were clearly a number of European central banks, including the Bank of England, if they looked at inflation in the UK earlier might have come to the conclusion that they should have started raising interest rates but didn't actually until the Fed was in action. I think it's pretty clearly the case that the Federal Reserves, the impact of Federal Reserve monetary decision making is now significantly greater than it was, say, in the period before the crash. So I've spent quite”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Let's take a turn back to finance. So the interest rates in the US are at 5.5% for the upper range. And I'm just taking a look at the Bank of England as well as the European Central Bank, ECB. The sense is that the Federal Reserve is perhaps done completely with hiking interest rates. And if they have another hike, it's just one. So the peak will be 5.75%. Are you thinking, or is it what is the perception across the pond where you are that the Bank of England and the European Central Bank will also be done? And if the Fed starts cutting rates may cut rates as well? And also, can you perhaps comment on just the dominance of the federal reserve? In other words, that other central banks, including very powerful central banks such as the European Central Bank, kind of, you know,”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Sorry from that source, but you've got to think about the system costs of basically running electricity, generating electricity from multiple energy sources, because nobody's in the position where they can run the whole thing off solar and wind. There's effectively, even in a country like Denmark, where it can be pretty high, is there's got to be some backup essentially like operation. And if you're shutting, say, let's just say coal-fired power stations for the sake of argument, if you're shutting them, opening them up, shutting them back down again when they're not needed, the costs of that are quite considerable. So it's really, I think the system costs that has to be thought about rather than the unit level cost of a unit of energy being produced, unit of electricity being produced.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“At the very least, the state backing those projects. And I think that is part of the story. I think in terms of the win cost issue versus gas costs, I mean, the narrative you're hearing repeated endlessly in one sense correctly by people who think that we can go a lot faster and soda and wind will say, well, look how price, how cheap the price is not just against other possibilities as the primary energy source for electricity, but also against the cost of what solar and wind was 10 years ago and 15, 20 years ago. The thing is though, you're not really comparing something that's necessarily useful in doing that because you've got to think about, that's just kind of like the unit cost of actually producing that unit of energy of electricity.”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I mean, I think a lot of the costs are basically capture the capital expenditure of building nuclear reactors. And I think that The uranium costs are not. I want to say that they're insignificant, but they're not really the same as the costs of literally building things. I mean, just to give you an example, when the David Cameron first became British Prime Minister, the coalition government with the Liberal Democrats here in the United Kingdom were committed to building nuclear reactors as long as the conservative manifesto said there were no public subsidies for that. Well, by 2015, 2016, they would have changed their minds about that and effectively provide government guarantees to try to get the Chinese to invest in building nuclear power reactors in the UK. It's pretty difficult to do the financing without”
2023-10-16 · Forward Guidance · The Future Of Financial Repression | Helen Thompson on Energy, Capital Controls, and the Federal Reserve · IDENTIFIED FROM THE TRANSCRIPT