Those who worry that the extraordinary stock market rally will come to an end in 2022 may be worrying too soon: equities could still power ahead, and particularly so in Europe.
Continue readingA century ago, the roaring ’20s were a time of hedonistic excess. After the horror of World War I, people wanted to rebuild, but also to forget. Wealth increased, and so did prices.
While we like to think we are smarter, or at least more knowledgeable than 100 years ago, there are worrying similarities between the two periods. If anything, the excesses this time around are much greater.
Continue readingInflation is here to stay, rather than transitory, no matter what central banks are telling us. But rising inflation could help make the global economy more efficient. Here are three potentially positive consequences of high inflation:
Continue readingThe euro has lost a lot of ground versus other major currencies as the European Central Bank (ECB) is taking a very dovish stance even compared to the usually dovish Bank of England.
As expected, a German has the difficult task of being a lone hawk amid doves: Isabel Schnabel, member of the ECB’s Governing Board, recently warned that the central bank has consistently been wrong in its inflation forecasts.
Continue readingThere are moments in politics and policy that change the course of history; when they can be summarised in three words, they are the best.
Mario Draghi’s statement back in 2012 that the European Central Bank will do “whatever it takes” to save the euro was such a moment: from then on, the speculators’ attack on weaker eurozone members’ sovereign debt stopped.
Another such moment came three years later, when in 2015 German chancellor Angela Merkel allowed one million refugees to enter Germany. “Wir schaffen das” (we can manage this), she said.
Continue readingWith almost every investor out there claiming deep commitment to the environmental, social and governance (ESG) cause, one issue on which there is surprisingly little debate is that of cryptocurrencies.
Investor enthusiasm for these two new buzzwords in the investing world is high, but few people are ready to admit that they are mutually exclusive: you cannot claim to focus on ESG and own Bitcoin at the same time.
Continue readingAfter Brexit, the UK seems to be jumping randomly from one crisis to the next, and the government seems strangely unperturbed by the general distress.
Partly, this can be attributed to the politicians’ own failure to learn. Prime Minister Boris Johnson has proven again and again that he is prone to repeating past mistakes — the way he handled the multiple lockdowns in the Covid-19 crisis is the best example of this.
But what if at least part of it is deliberate? There could be a couple of reasons for which crises suit Johnson and his government very well, at least for a while.
Continue readingThe queues for petrol in the UK are perhaps the most important post-Brexit moment for Boris Johnson and for those who followed his advice and voted to leave the European Union.
Continue readingWith developed world populations ageing fast, you would think that entrepreneurs would be jumping at the opportunity to find new ways to cash in the silver dollar (pound, or euro, yen, etc).
The Covid-19 pandemic offers a big opportunity to do that – the key is for governments to act to facilitate it.
Continue readingThe perfect storm is brewing for UK inflation. Boris Johnson and his government will not admit it, but their choice of a hard Brexit will exacerbate price rises, on top of the effects of the Covid-19 pandemic.
This could put the Bank of England in the unenviable position of having to choose which bubble to burst: consumer prices, or house prices.
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