Tag Archives | central banks

Ring of fire Feb15

Fault-lines open connecting the debt-fuelled ‘Ring of Fire’

Next week, I will publish my annual Budget Outlook, covering the 2017-2019 period. The aim, as always, is to challenge conventional wisdom when this seems to be heading in the wrong direction: The 2007 Outlook ‘Budgeting for a Downturn‘, and 2008′s ‘Budgeting for Survival’ meant I was one of the few to forecast the 2008 […]

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Brexit Oct16

Markets doubt Carney’s claim to have saved 500k UK jobs

Last week as the BBC reported, Bank of England Governor, Mark Carney, explained to an audience in Birmingham that the Bank had saved the UK economy after the Brexit vote in June: “Between 400,000 and 500,000 jobs could have been at risk if the Bank had not taken action after the referendum, he said.  ”We are willing […]

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Oil markets enter the “post-fact economy”, where details of supply/demand no longer seem to matter

Once upon a time, oil markets were based on facts.  Producers and consumers focused on trying to understand what “would” happen”, whilst the speculators placed their bets on what “could” happen. In those days – even 20 years ago, as the chart shows – the role of the speculators on the futures markets was very […]

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Central banks defy slowing global economy by destroying markets’ power of price discovery

Markets have one main function in life – price discovery.  If I want to buy, and you want to sell, the existence of a market allows us to discover the price at which the market will balance in terms of supply and demand. History, however, provides many examples of times when rulers decided they knew […]

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Central bankers create debt, not growth, by ignoring demographic reality

The world’s 4 main central bankers love being in the media spotlight.  After decades climbing the academic ladder, or earning millions with investment banks, they have the opportunity to rule the world’s economy – or so they think. But their background is rather strange preparation to take on this role – even if it was […]

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6 impossible things not to believe about oil before breakfast

 ”Sometimes I’ve believed as many as six impossible things before breakfast.” Oil traders know how the Queen felt in Lewis Carroll’s famous book, Alice Through the Looking-Glass.  The list of impossible things that they are being asked to believe grows almost by the day:   Last week, prices jumped 4% on the basis that strong […]

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Stocks Sept16

Investors panic in “search for yield” as interest rates go negative

Its been a great few months for financial markets.  All the major markets have seen gains, as the chart shows – something that has happened only once before, since my half-yearly reviews began in March 2009: □   Long-term US Treasury bonds have gained, as long-term interest rates have been falling □   The 30-year bond […]

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You’ve seen the Great Unwinding; get ready for the Great Reckoning

Companies and investors now need to prepare for the Great Reckoning, as I describe in my latest post for the Financial Times, published on the BeyondBrics blog We have reached the second anniversary of the Great Unwinding of policymaker stimulus. Almost inevitably, this now seems likely to be followed by a Great Reckoning, a consequence […]

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Pensions crisis finally becomes a mainstream issue

It has been 5 years since we first warned of a looming pensions crisis in Boom, Gloom and the New Normal.  Now, finally, it is becoming a mainstream issue.  The latest round of central bank stimulus policies has clearly been the proverbial “straw that breaks the camel’s back” for anyone connected with pension funding. The […]

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Suspense rises as Great Unwinding becomes the Great Reckoning

“There is a distinct difference between “suspense” and “surprise.”  Alfred Hitchcock It is now 2 years since the start of the Great Unwinding of policymaker stimulus.  On 15 August 2014, Brent was at $105/bbl, and the US$ Index was at 81. Since then, as the chart shows, Brent oil prices have fallen 53%, whilst the […]

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