Early 2022, China urged the West not to raise interest levels as countries (read: China) were still recovering from Covid-19 (eg, Barron's, CNN). Since March, the Fed has warned markets that it may raise US interest by even 0.5%. The impact is clear: money is fleeing China. Euro, Pound and Yen are near historic lows. The Fed does not have much choice as inflation in...
Various stock market indices have shown historic peaks last week (eg, AEX, S&P). The NASDAQ Composite reached its all-time high already on 12 February 2021. Nevertheless, the Chicago Board Options Exchange (CBOE) Volatility Index is far from its end of March 2020 peak. Why do historically high stock (and bond) prices, amidst a pandemic, not translate in...
Some twenty years ago, an investment banker - overseeing the restructuring of a company - said the following words to me: Small debt is the problem of the debtor; high debt is the problem of the bankers (or creditors). History has proven the validity of his view (eg, Greek government-debt crisis of 2007-2008, the various Argentine debt restructurings). The various...
The Economist title: Why zero interest rates might lead to currency volatility The Economist subtitle: There is little scope for them to adjust to economic trouble. So something else must Date: 4 July 2020 "A generation of English cricket fans know the Aussies are loth to surrender a lead. For much of the past two decades, Australia has been a high interest-rate...
Former US president Obama is the first modern Democrat who left huge deficits. He had an excuse. Before Obama, Democrats were often the ones cleaning up the financial mess left by Republicans (eg, Bush tax cuts). Today, both parties believe in the Modern Monetary Theory (MMT), which argues that government budget deficits are solved by printing new money. Printing...
The Guardian title: IMF boss says global economy risks return of Great Depression Guardian subtitle: Kristalina Georgieva compares today with “roaring 1920s” and criticises UK wealth gap Date: 17 January 2020 "The head of the International Monetary Fund has warned that the global economy risks a return of the Great Depression, driven by inequality and financial...
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