Farewell to 2017

Is it better to travel than to arrive?  The US share market has done well this year.  It has been in fitful anticipation of tax cuts to come.  As the old year draws to a close the tax cuts have as we expected taken legislative form. The US growth rate has risen, exceeding 3% as … Continue reading “Farewell to 2017”

Outlook 2018: Another good year for investors?

As investors look ahead to a new year, they could be forgiven for wondering whether they will be as pleasantly surprised in 2018 as they were in 2017. A number of political worries on the horizon this time last year signally failed to materialise, including the likely shape of President Trump’s trade policies, the rise … Continue reading “Outlook 2018: Another good year for investors?”

Eurozone: Political risk still simmering

The major political obstacles, which had held back European risk assets, have now been overcome. However, events in Austria, Spain and Italy highlight the ongoing trend towards populist, nationalist and now regionalist sentiment. In Austria, although the far right Freedom Party (FPÖ) was recently defeated in elections for the legislative parliament, it could enter government … Continue reading “Eurozone: Political risk still simmering”

QE: The Beginning of the End

To limit the damage from the financial crisis, central bankers were forced into Quantitative Easing (QE) on a massive scale, in possibly the largest ever monetary policy experiment. The policy worked and confidence returned to financial markets. Nearly a decade on from those events, are we now looking at the end to QE and the … Continue reading “QE: The Beginning of the End”

Has QE failed, and if so why are markets clamouring for more?

The aim of Quantitative Easing [QE] was to support global economic growth in the wake of the Global Financial Crisis, and help to push GDP growth back towards its trend rate, typically around 3.2 – 3.5% for the world and 2 – 2.5% for the UK. This would allow the amount of outstanding debt to … Continue reading “Has QE failed, and if so why are markets clamouring for more?”

Should we worry about Japanese debts?

Investors like to worry. When you’ve got your money at risk it is natural to do so. It is commonplace to read about the very high levels of Japanese state debt, with some querying how much longer it can carry on. Japan has the highest level of state indebtedness of the main economies. Its gross … Continue reading “Should we worry about Japanese debts?”

Keynesian vs. Monetarism

There have been two schools of thought in the history of economics; Keynesian and Monetarism. The former rests on the belief that government actions can determine growth in the economy, spending money on say infrastructure projects when demand is slack and reining back once the economy picks up. Monetarism on the other hand believes the … Continue reading “Keynesian vs. Monetarism”

Monetary policy: a bridge over troubled waters?

“The European Central Bank’s actions can only build a bridge to the future. The project must be completed through decisive actions by governments – both individually and collectively – to address the underlying causes of our current challenges.” – European Central Bank President, Mario Draghi, September 2012. Eurozone:  And friends just can’t be found Mr … Continue reading “Monetary policy: a bridge over troubled waters?”

Has QE caused a crisis of capitalism?

Capitalism has delivered prosperity, and countries that adopt the principles of free markets and enterprise are more prosperous. Witness the countries of the former Eastern Bloc. However it would be disingenuous to say everyone at all times benefit from capitalism. It does suffer from crises and the Great Financial Crash (GFC) in 2008 may be … Continue reading “Has QE caused a crisis of capitalism?”