The Financial System Limit

Radical Thoughts about Money

David Kauders

• Publisher: Sparkling Books
• Year: 2020
• ISBN:
  9781907230776
• Topic: Economía
• Subtopic: Teoría económica

How can the world pay for the economic cost of the coronavirus pandemic?

David Kauders shows that all schemes that borrow from the future are thwarted by three related concepts:

- the true cost of debt to society,

- the central banking economic cycle, and

- the financial system limit.

Taken together, these three concepts mean that the economic depression caused by the pandemic will be deflationary. No amount of monetary finance or fiscal stimulus can neutralise this. Economic recovery from the 2020 pandemic can only be achieved through a combination of taxation, use of equity rather than debt finance, and some limited changes to global banking.

The author challenges the existing academic and political consensus about how economies should be managed, showing that finance is the root cause of public dissatisfaction with the elite and their policies. Serious problems of both inequality and populism have their origin in monetary and economic policy. Estimates show that one-fifth of all economic output is spent on interest: this is too high an overhead and cannot be allowed to increase. The old arguments about sound money versus stimulus, as well as contemporary arguments that governments controlling their own currency can create as much credit as they wish, are fundamentally unsuited to the deflationary shock that has occurred.

Whether you are a concerned individual, an academic, politician, banker or even a policymaker, read about a different view of the current financial orthodoxies, one that will provoke serious debate and even action.

" Radical thinkers might have a point" was how the Financial Times described David Kauders' first book The Greatest Crash: How contradictory policies are sinking the global economy. This new book offers further original thought.