Historians will not look kindly on Mario Draghi, head of the European Central Bank. They will ask what he thought he was doing, issuing an extra €1tn ($1.05tn) of debt from March 2015, when the Eurozone was already struggling under a dead-weight of government debt: In the big countries, Italy has $47k of debt per person; […]
Tag Archives | deflation
One of the great myths of our time is that the world’s population is inevitably growing. Almost everyone has heard that the population is certain to reach 9bn by 2050, from today’s 7.3bn. Yet births in 2013 in the G7 economies (almost half of the global economy) were at the lowest level since the Great Depression year […]
Another week, and another record high for US oil inventories. Oil prices clearly have some way to go, before they return to being based on the fundamentals of supply and demand. Thankfully, the looking-glass world of $100/bbl prices has finally begun to shatter over the past 9 months. And we can expect prices to return to historical […]
Unfortunately, the European Central Bank (ECB) does not read the blog, or yet subscribe to ‘The pH Report’. If it did, it would have been forewarned back in August that a collapse in oil prices was potentially about to provide the catalyst for the arrival of deflation. Instead, as the Minutes of its critical January […]
Debt, debt, glorious debt, Nothing quite like it for cooling the blood. So follow me, follow, down to the hollow And there let us wallow in glorious debt (apologies to Flanders & Swann) It seems impossible today, but until the year 2000 most Western countries were reducing their debt burdens. Thus President Bill Clinton boasted […]
Living standards have risen 20-fold over the past 200 years. Yet they rose just 3-fold over the previous 800 years. What enabled this dramatic change to take place? The key event was clearly the Industrial Revolution. As Andy Haldane, chief economist at the Bank of England, notes in a thought-provoking new paper: “In explaining rising living standards since […]
The world’s major shipping index, the Baltic Dry (BDI), has collapsed by 2/3rds since November, and by 80% since its earlier December 2013 peak, as the chart shows. It is now at an all-time low of 509, almost half of its initial 1000 level when established in January 1985. Shipping is the major mode of transport for world trade, […]
More and more commentators are beginning to recognise that deflation is becoming inevitable in many major economies: China’s producer prices fell -4.3% last month, and its consumer prices rose just 0.8% Eurozone consumer prices fell in December to -0.2%, and are likely to have fallen further in January US prices rose just 0.8% in December and are […]
The above chart highlights one major reason behind my forecast last August that oil prices were about to collapse. This was that US inventories were so high, storage was starting to run out: Inventory had reached all-time record levels, and was at around 60 days of sales (blue area) And so prices simply had to fall, to […]
The world is about to be hit by a demand shock equivalent to 1973′s supply shock. Yet, astonishingly, most commentators remain so focused on central bank activity, that they have completely missed what is happening. Here’s how it is playing out. You may remember the ‘The pH Report‘ forecast in early December that: “Oil prices […]
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Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry.
The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts.
Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.