News 2023

An overview of the IIMR and its team in the news this year.

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8th September

Our Chairman, Professor Tim Congdon, is mentioned in this article in Stockinvestor.com by Mark Skousen. He features a chart from the special E-mail Tim sent out last week highlighting the decline in US M3 (although the chart actually illustrates the growth rate of US Bank deposits). The article predicts a recession in the US in 2024.  

1st September

Julian Jessop acknowledges the work of IIMR Chairman Tim Congdon and former Director Dr Juan Castaneda in his article for the Spectator about printing money. He writes:  "They correctly predicted in 2020 that excessive monetary growth (largely as a result of how central banks helped to finance government borrowing and spending via QE) would cause an inflationary boom. This message was echoed by members of the Shadow Monetary Policy Committee (SMPC), hosted by the Institute of Economic Affairs. But we were in a small minority."

1st September

CapX featured an article by our Director, Damian Pudner, in which he criticises the Bank of England’s Monetary Policy Committee for its mismanagement of the economy, especially since 2020. He puts the blame fairly and squarely on the dominance of  New Keynesianism’s three-equation model in the Bank of England’s monetary policy decision-making process, which completely ignores the quantity of money. He expresses hope that the rest of the BoE’s Monetary Policy Committee will follow the lead of Huw Pill, the Chief Economist, who recently expressed his support for keeping interest rates at their 15-year high of 5.25% for an extended period, rather than pursuing additional rate increases.

1st September

The Financial Times published a letter from our Chairman, Professor Tim Congdon, in which he points out that if the money numbers are ignored, it is no surprise that forecasting goes awry. NB: This letter can only be read by paid subscribers.  

30th August

Our Chairman, Professor Tim Congdon, is mentioned briefly in this article by Tom Rees in Yahoo Finance News. Today, the Bank of England published the July money figures, which show that M4x, the BoE’s Broad money measure, has not increased in the last year, the first such occasion in at least 13 years. Mr Rees says that these figures will cause monetarists such as Prof Congdon to show restraint  in its fight against inflation  - in other words, to desist from any further hikes to the Bank Rate. Former Governor Mervyn King is also mentioned, as he too has expressed concerns that the Bank of England’s Monetary Policy Committee are ignoring signs in the money data.    

3rd August

The Negotiator, an on-line magazine for residential estate agents, published an article featuring a number of largely negative comments about last week’s 0.25% increase in the Bank Rate by the Bank of England. Two members of the Shadow Monetary Policy Committee were quoted, one being Dr Juan Castañeda, our Deputy Director, who expressed his concern that the contracting money supply over recent months will have a strong disinflationary pressure.

3rd August 2023

Damian Pudner, IIMR’s Director, has co-authored an article for City AM with outgoing Deputy Director Dr Juan Castañeda  expressing concern about the Bank of England, series of  interest rate rises.  Having dramatically underestimated the likely course of inflation in 2021, the bank is now in danger of going to the opposite extreme in its desire to bring inflation down to its 2% target.  There is a real danger, so the authors warn, that these increases in borrowing costs will exacerbate the decline in the quantity of M4x money, deepen the forthcoming recession which is now inevitable and lead to a return of the “Boom and Bust” cycles which characterised the latter years of he 20th century.  

NB: Since this article appeared, the Bank of England’s Monetary Policy Committee voted to increase the Bank Rate by an additional 0.25% (25bps).   

22nd July 2023

Dr Juan Castañeda, the Deputy Director of the Institute of International Monetary Research,  was interviewed about the Bank of England and inflation by Talk TV. You can watch the interview here. The relevant section is between 55 minutes and 1 hour 3 minutes into the overall programme.   

20th July 2023

A chart produced by the Institute of International Monetary Research featured in this article by Professor Kent Matthews of Cardiff University. The article, published by Globely News,  dealt with China’s weak economic recovery following the abandoning of lockdowns last year, expressing concerns that without major structural reform, growth could fall below 2% by the next decade.  

12th July 2023

The Daily Telegraph featured an article co-authored by Damian Pudner, the Director of the Institute, and Deputy Director Dr Juan Castañeda highly critical of the Bank of England, particularly over its monetary policy failures since 2020 which have resulted in the recent high levels of inflation. While granting it independence seemed a good thing in the 1990s, the net result has been a lack of accountability, which is not acceptable given its poor performance recently.  

8th July 2023

Our Chairman, Professor Tim Congdon, is mentioned in a lengthy article by John Plender in the Financial Times. This is in connection with his prescient forecasting of the recent inflationary surge and his warnings that the contraction in broad money in the US and the Eurozone and very weak M4x growth UK will lead to recessions. The article considers bond yields, which have risen recently, concluding that there will be no repeat of the "Bull Market" in bonds as there was in the 1970s. It also claims that central banks may find themselves in a difficult position if likely increases in public borrowing make it harder to stick to the current 2% inflation targets. 

21st June

An article by Stephen Vass on the increasingly shaky foundations of China’s economic recovery in The Conversation reproduced (with acknowledgement) a chart featured in one of the Institute’s recent money notes, which shows the annual and annualised quarterly rates of broad money growth in the country since 2004.

The author predicts that demographics and the decline of private investment will cause GDP growth in China to decline to levels more typical of developed countries by 2030 without drastic reform.

6th June 2023

Our Chairman, Tim Congdon, was mentioned briefly in this article by Paul Ormerod for City AM.

The article discussed a paper written for the American Economic Review by David and Christina Romer, which concludes that monetary policy is indeed important. Monetary shocks have large effects on unemployment, output, and inflation. They argue that a contractionary monetary shock occurred in the United States in 2022, which will lead to a recession, exactly what our Chairman has been saying.

9th May 2023

Our Chairman, Professor Tim Congdon, is mentioned in this article by Philip Aldrick for Bloomberg. The theme is similar to that of the two articles below - namely, that the Keynesian consensus in both the Bank of England and the US Federal Reserve  needs to be broken.

28th April 2023

The Bank of England refuses to accepts that it is responsible for the current high inflation, says Ambrose Evans-Pritchard in the Daily Telegraph. He points out that "Professor Tim Congdon and his colleagues at IIMR" supported the QE programme of 2008-9 but not that of 2020 because the economy was in a very different position. He states that "there is no question that Britain’s small band of monetary theorists has been right at key inflection points over recent history" and suggests that when there is next a vacancy in the Bank of England's Monetary Policy Committee, a monetarist should be appointed.

28th April 2023

Our Chair Tim Congdon's pamphlet for Politeia, Inflation: Why has it come back? And what can be done? which was launched on Wednesday 26th April, has been reviewed by the Reaction on-line magazine.   Tim does not mince his words in his latest publication:- “Large overshoots or undershoots on the inflation target should result in the automatic resignation of the Governor and the Deputy Governor for monetary policy.” The author points out that in spite of the warnings Tim was sounding as far back as 2020 regarding the inflationary consequences of the Bank of England's asset purchases, not a single member of the  Bank's Monetary Policy Committee shared his thinking, so his message was ignored.  Sadly, there is no sign of any new members being appointed to challenge the groupthink in the MPC which has led to the current inflationary surge.

18th April 2023

"They've got it wrong; hopelessly so." IIMR Chair Tim Congdon was talking about the Bank of England in another  interview for Bloomberg UK with Caroline Hepker and Elina Ganatra. He went on to add, "I’ve been commenting on the Bank of England best part of 50 years now. I have to tell you, the current lot are some of the worst I’ve ever commented on.”

17th April 2023

“My view is that there will be a recession” – so said IIMR Chair Tim Congdon in an interview for Bloomberg UK with Caroline Hepker and Tom Mackenzie. He warns that the current high inflation episode will be severely reduced as the quantity of money continues to contract,with inflation figures below 5% by early 2024, and close to target by the end of 2024​.  

12th April 2023
 
Our Chair, Professor Tim Congdon, is featured once again in an article by the Australian on-line magazine Firstlinks. The article mentions his correct forecasting of the inflationary boom back in 2020 and then quotes from his March 2023 video, where he warns of forthcoming recession, possibly severe, because of the recent collapse in broad money growth. The article focuses on his comments about the USA and Eurozone, mentioning Prof. Congdon's fears that bank regulators could impose extra capital requirements for banks, which would only make the recessions worse. 
 
11th April 2023
 
Philip Aldrick for Bloomberg News UK, quotes our Chair, Professor Tim Congdon, who is warning that just as high money growth in 2020 foreshadowed  the present high levels of inflation, so tumbling money growth in recent months points to a recession.
 
11th April 2023
 
There is further coverage of Tim Congdon's concerns in this article from Capital Market Laboratories which also mentions Simon Ward, another UK economist with similar worries. The article points out how the monetarist perspective contradicts the official narrative that the economy is picking up and features a number of short bullet points which highlight the unparalleled monetary tightening in the last year and its effect on broad money growth. Another bullet point mentions that Bank of England officials are very dismissive of this analysis.
 
4th March 2023
 
Our Chair, Professor Tim Congdon, was mentioned in an article by Jeremy Warner, published in The Telegraph entitled ‘We’ll all pay for the Bank of England’s blindspot for the bleeding obvious’. 
The author mentions how the “quantity of money is scarcely ever mentioned by the Bank of England, or indeed the US Federal Reserve and the European Central Bank [and] in failing to take it on board they hopelessly misjudged last year's sudden spike in inflation.” This is something the Institute (and our Chair) has been pointing out since the spring and summer of 2020!
He goes on to say “The surge in money up until the middle of last year was, moreover, so massive that it may have created an overhang that cancels out today's contraction. So massive, in fact, that the ratio of money to GDP is not yet back to where it was just ahead of the pandemic, Tim Congdon, another monetarist, points out.”
 

1st February 2023

Our Chair, Professor Tim Congdon, was mentioned in an article by Graham Hand, published in Firstlinks, an Australian on-line financial bulletin, The author mentions that Firstlinks had published Tim's warnings of high inflation as far back as 2020 and that his predictions have proved correct. Interestingly, the article reproduces the US money chart from one of the late 2022 IIMR money notes.

 15th January 2023

Our Chair, Professor Tim Congdon, was mentioned in an article for Econlib by Scott Sumner, an influential American economist. Entitled My 2021 mistake, Sumner admits that he should not have supported the US Federal Reserve's new "Average inflation targeting" policy last year as it became apparent that the Fed was only concerned with inflation undershoots, not overshoots. Tim and Bob Hetzel (another US economist who has spoken at conferences organised by the Institute) are cited as two men who were  - correctly in the writer's opinion - critical of the Fed's expansionary monetary policy right from the start.