Tag Archives: household debt

Housing wealth soars while productivity lags

A 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 reading

Why the ECB is in no hurry to fight inflation

The 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 reading

To fight inflation, wealth needs to be taxed more

Even though the vaccines have the potential to reduce the Covid-19 pandemic to manageable levels, the scars will be felt for years to come.

Beyond the tragedy of the loss of human life, deepening inequality is perhaps the worst consequence of the pandemic. Governments around the world will seek to take steps to reduce it, fearing civil unrest.

Continue reading

Mortgage guarantee could sow the seeds of trouble

The UK government awarded hard-working medical staff a meagre 1% pay rise in the most recent budget, all the while splashing out on yet another indirect subsidy for house prices: the mortgage guarantee.

Continue reading

Forget Brexit, debt is what is killing the British economy

The International Monetary Fund is worried. Yes, it’s true that it always is, but this time we should be, too — or at least, those of us living in Britain.

Continue reading

A research paper supports the idea of debt forgiveness

If you’re like me, you’ve certainly wondered why economic growth has been so sluggish after the worst post-war recession — the Great Recession, or Great Financial Crisis as some have callednthe 2007-2009 crisis. Normally, the economy should have surged, after such a deep slump.

Instead, we’re proud of economic growth figures around 2% in Britain and the US and cheer when the eurozone posts a meager GDP advance of above 1% almost a decade after the crisis.

Continue reading

Central bankers are trapped by their own policies

It’s unclear when it all started, but it has reached the point where it would make the biggest banker of all times, John Pierpont Morgan, turn in his grave.

Continue reading

Post Brexit, loss of ‘coolness’ is the hardest to price in

The way the markets have reacted to Brexit, you’d be forgiven to wonder what the fuss was all about.

Continue reading

Learn to love the Swedish housing price bubble

The issue of the runaway Swedish housing price bubble has been well known for a while, and the problem just keeps growing bigger. At this point, however, any attempt to tackle it could make things worse.

Continue reading

The UK would cope well with a rise in interest rates

As more and more people fret about imminent interest rate increases by the Federal Reserve and the Bank of England, a report release by the Bank for International Settlements (BIS) shows that companies and households in the UK would be able to cope relatively well with a rate increase.

Continue reading