Monday’s Interesting Quotes post highlighted how China’s leadership clearly recognise they have a massive debt problem, as detailed in the blog’s recent Research Note. Further evidence for this was provided by yesterday’s bank lending figures, which showed total lending down 19% versus March 2013 at Rmb2.07tn ($333bn), and the lowest increase in money supply since 2001. This makes […]
Chemicals and the Economy
Japan’s debt now $80k for every man, woman and child
Question: Why will Starbucks reduce the menu price for its venti green-tea frappucino in Japan next Tuesday, when the price is actually going up? Answer: Because the government hopes the lower menu price will fool people into thinking the price has gone down It is, of course, a nonsense. And no doubt most Japanese will be quite annoyed that […]
Demographics drive demand and fertility rates have fallen
A major debate is underway in Eurozone financial markets about the imminent approach of deflation. As the chart above shows, Eurozone inflation has ben falling steadily for the past 2 years. Yet most still fail to recognise that today’s demographics make this development more or less inevitable. The Financial Times has kindly printed the blog’s […]
“The dog ate my homework”: excuses for economic slowdown
There were never any excuses from policymakers during the BabyBoomer-led SuperCycle from 1983 – 2007. The Chairman of the US Federal Reserve, Alan Greenspan, came to be styled ‘The Maestro’. Whilst the Governor of the Bank of England argued that his efforts had created the NICE decade of Non-Inflationary Constant Expansion. Central bankers came to be seen as wise […]
Protectionism edges closer as US holds back on Fast Track Authority
The mainstream media rather ignored a key event last week, namely that the Democrat leader of the US Senate signalled he would not try to pass Fast Track Authority to allow the President to conclude new trade deals with the EU and Pacific countries. Nobody seems to want to face the unpalatable truth, that this […]
Seven global implications of China’s new policies
Everyone remembers the old joke, “Why did the elephant wear dark glasses?”, and the answer, “So that she wouldn’t be recognised”. A new version popped into the blog’s mind this week, when finishing its new Research Note on the impact of China’s new policies on the global economy: “Why did nobody notice that China was the ‘elephant […]
Deflation gets closer in Europe, USA and China
Demographics drives demand. If it doesn’t, then its hard to think what does. So forecasting economic growth depends on two key variables: If you have lots of young people in your adult population, then you should have fast growth If you have lots of older people, then you will be lucky to have any growth […]
The trend is your friend, until it isn’t
Investing in today’s financial markets is relatively easy. You simply have to believe that governments in the US, Japan and Europe will continue to provide plenty of free cash to investors as part of their Recovery Scenario of a quick return to ‘normal growth’. It doesn’t matter whether the investor believes in the Scenario, the driver is simply the fear of […]
Deflation far more likely than inflation
The last in the blog’s series on things that we think we know, but may not, looks at the prospects for inflation. A new survey this week of the world’s wealthiest individuals summed up the consensus view: “If there are two factors that make the rich stand out, on this survey, it is their fear […]
Japan’s ageing population challenges hopes of economic growth
The blog’s new series on the likely demographic impact on the world’s Top 5 economies today moves across NEA to focus on Japan – the world’s 3rd largest economy ($6tn). As the chart shows: It has seen life expectancy (red column) increase by a third since 1950, to reach 82 years today At the same time, its […]
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