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Chemicals and the Economy

The blog in 2015

2015 was the year when companies and markets began to feel the impact of the Great Unwinding of stimulus policies. The blog’s readership has increased significantly as a result, as people began to abandon the consensus wisdom which had so clearly failed – once again – to provide a reliable guide to the outlook. The […]

Deflation returns to the major economies as stimulus fails, again

Next week, I will publish my annual Budget Outlook, covering the 2016-2018 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 Crisis 2009′s ‘Budgeting […]

China fooled the world, and now comes the Great Unwinding

The global commodity super-bubble is coming to an end, as I describe in my latest post for the Financial Times, published on the BeyondBrics blog It is exactly a year since we forecast that a Great Unwinding of stimulus policies was underway, due to a major slowdown in China. As we warned on beyondbrics: Oil and commodity prices are […]

Contagion hits financial markets as Great Unwinding continues

Crude oil prices continued to fall towards $30/bbl last week.  Markets are finally starting to recognise, as the BBC reported last year, that ‘China fooled the world‘ with its stimulus programme. It had not suddenly become middle-class by Western standards in 2009.  Instead, aided by developed country stimulus policies, its own stimulus had helped create […]

Stimulus proves no solution for today’s economic slowdown

“Central banks have to be mindful that too long a period of very low interest rates can have undesirable consequences in the context of ageing societies. For pensioners, and those saving ahead of retirement, low interest rates may not be an inducement to bring consumption forward. They may on the contrary be an inducement to […]

Oil price rally a “Head Fake” says International Energy Agency

Why wouldn’t oil prices return to their long-term average around $30/bbl?  After all,  the world is facing a long-term energy supply glut.  The latest monthly report from the International Energy Agency (IEA) confirms my view that the recent rally has simply been a trading coup: “HEAD FAKE “Behind the façade of stability, the rebalancing triggered by the price […]

Stock markets focus on central banks, ignore debt default risk

Some extraordinary things are happening in global chemical markets.  They indicate something is very wrong in the real world outside financial markets.  The chart above highlights some key developments since 18 August when the Great Unwinding of policymaker stimulus began: Brent oil prices have halved and are down 51% (blue) Naphtha, the main feedstock for the global industry, has also halved […]

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