“More buyers than sellers” was financier JP Morgan’s famous reply, when being asked why stock prices had risen. The same, of course, is true of inflation. During the 1970s, there were large numbers of Western BabyBoomers, and relatively few older people producing the goods that these young people wanted to consume. So inflation rose sharply, to […]
Tag Archives | deflation
Sometimes a picture really is worth 1000 words. This is certainly true with the above chart, showing China’s producer price index since 2008: • It highlights prices up 10% at the peak of the export boom, before the H2 2008 crash • Then it shows the short-lived recovery after China’s massive lending boom • Finally, […]
A year ago, a panicked Federal Reserve introduced its QE2 programme. One of its key aims was to kick-start US growth via driving down the value of the US$ and boosting exports. Since then: • The US$ has fallen, and US exports have increased • But other major countries have become alarmed about the impact […]
In one of its first posts, at the time of the ill-fated Access deal for Lyondell in July 2007, the blog highlighted the strange divergence that had developed between the front pages of the newspapers, and their business coverage: “If you read the financial pages of your newspaper, everything sounds rosy. But if you turn […]
Many readers have been taking a well-deserved break over the past few weeks. As usual, therefore, the blog is highlighting key posts during August, to help you catch up as you return to the office. August has been surprisingly busy: Force Majeure reports show worrying increase highlighted the worrying rise in force majeures, which may […]
The blog has been revisiting the Bank of England’s 2008 analysis of the likely impact of the financial Crisis. This reviewed 33 banking crises between 1977-2002 and found that: • The average length of each crisis was 4.3 years • The median loss of GDP was 7.1% • Major crises (such as today’s) caused GDP […]
The blog is a great fan of Pimco, the world’s largest bond fund managers. They were the first people to spot the housing bust developing in the USA, and to suggest the scale of the damage it might cause. More recently, they have pioneered the concept of the ‘new normal’. Thus a new analysis by […]
When the G-20 met in London in April 2009, they produced a Communiqué containing just 688 words. And as the blog noted in conclusion, there was “no sign of a ‘Plan B’ being developed“, in case the Stimulus measures failed to work. This was still the case last September in Pittsburgh, when the Leader’s Statement […]
The blog remains amazed, and worried, by the inability of many of those reponsible for the global financial system to provide the necesary leadership during the current Crisis. They seemingly failed to grasp in March 2008 that Bear Stearns’ bankruptcy was a clear sign that a major global financial crisis was around the corner. Equally, […]
Wal-Mart, the world’s largest retailer with $400bn sales, saw deflation in its core US market last quarter. Prices were down minus 1.6%, even more than the -1% forecast. The cause was lack of confidence amongst shoppers, many of whom are now living “paycheck to paycheck”. The major retailers have an excellent record as forecasters of […]
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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.