The Need to Return to a Monetary Framework

This paper examines the 100-fold increase in reserve balances at the Federal Reserve during 2008. By looking at the balance sheet of the Federal Reserve and factors influencing the supply and demand for reserves, the paper shows that the increase was due to large purchases of securities and loans to certain sectors and institutions. Such actions constitute a combination of monetary policy and industrial policy, or a mondustrial policy. This characterization raises questions about the future of the Federal Reserve and suggests the need to return to a monetary framework that controls the money supply while the interest rate is zero and establishes rules for setting the interest rate.Business Economics (2009) 44, 63–72. doi:10.1057/be.2009.1

Along-side global political economy–a rhizome of informal finance

One contemporary issue confronting global finance is the nature and extent of its participation in and contribution to a global war on terror. To date, efforts have involved a variety of methods, including both an increase in the surveillance of financial transactions and the regulation of previously unregulated methods of financial exchange. This paper offers a conceptualisation of one informal value transfer method (known by its Arabic name — hawala) in the form of a rhizome, using the concept as developed by Deleuze and Guattari in A Thousand Plateaus. This paper argues that the ability of hawala to regenerate itself along multiple pathssituates the procedure as a rhizome, and that standard methods for inancial regulation fail to appreciate the crucial difference this regenerative ability makes for attempts at control and regulation. Consequently, the activity that the state is seeking to control will merely be displaced, to reform and regenerate itself yet again. To ground this argument in the present condition of the global political economy, the specific example considered is Al Barakaat, a transnational Somali firm that fell victim to the global war on terror in late 2001