The world’s central bankers would have been sacked long ago if they were CEOs running companies. They would also have been voted out, if they were elected officials. Not only have they failed to achieve their promised objectives – constant growth and 2% inflation – they have kept failing to achieve them since the Crisis […]
Tag Archives | Mario Draghi
Central bank policy-making is becoming more and more dysfunctional, as German Finance Minister Wolfgang Schäuble‘s comments highlighted on Friday: “The debt financed growth model has reached its limits. It is even causing new problems, raising debt, causing bubbles and excessive risk taking, zombifying the economy….and may have laid the foundation for the next crisis.” One clear sign […]
Financial markets are very bad at evaluating political risk. They assume people will always be rational, and expect a ‘business as usual’ scenario to continue. But as we all know, people are not always rational. And emotion, as today over immigration may cloud their judgement. This week has seen the first signs of this complacency […]
Pity poor Janet Yellen, you might say. The head of the US Federal Reserve told the Senate last week that she had been “quite surprised” by the collapse of oil prices since mid-2014. And she added that the rise of the US$ was similarly “not something that we had expected” (you can see the testimony […]
“There is no doubt that if we had to intensify the use of our instruments to ensure we achieve our price stability mandate, then we would.” (Mario Draghi, New York, Friday) Pity poor Mario Draghi, President of the European Central Bank (ECB). He is used to the adulation of markets – and adores his nickname […]
Central banks have acted as the proverbial tooth fairy towards financial markets in recent years. But they have not just left a small amount of money under the pillow when a child lost its first tooth. Instead they have printed trillions of dollars via Quantitative Easing (QE), to persuade investors to buy shares and commodities, […]
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; […]
The last 10 days have seen turmoil in major currency markets: The Swiss National Bank gave up trying to devalue versus the euro, and the franc jumped 30% in minutes The European Central Bank (ECB) launched its €1tn Quantitative Easing (QE) programme, causing an immediate 3% fall in the euro’s value versus the dollar These are major moves by any historical […]
It is impossible to overstate the seriousness of today’s threat from deflation. Policymakers refuse to accept that demographic change can create an economic impact. Instead, they want to believe that increasing debt can somehow stimulate growth. The Financial Times has kindly headlined the blog’s letter on this subject as its lead letter. June 10, 2014 […]
A year ago, European policymakers and central bankers were dismissive when the blog suggested deflation was a far bigger threat than inflation – when it was speaking at the world’s major conference for bond investors. Later this month, the blog expects a different response when returning to speak at the same conference. Last week, the European Central Bank (ECB) was forced to […]
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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.