Saudi Arabia is no longer ‘too big to fail’
December 5, 2018Is Saudi Arabia still an important partner to the US? The question answers itself, at least partially, with the Middle East having drastically changed since the strategic and fundamental alliance made in 1943 by President Franklin Roosevelt and King Abdulaziz Ibn Saud. It’s now a distant time when FDR boldly, vociferously claimed that “the defence…
The cabal against Carlos Ghosn
November 21, 2018Carlos Ghosn’s deposition? This is in no way a legal matter, and even less so a penal one: it’s rather a palatial revolution. Nissan is profiting from crime, mainly its CEO Hiroto Saikawa, who struggled to hide his joy at dethroning Ghosn after nineteen years of sole reign over not just the companies that he…
USA 0 China 1
November 19, 2018China is about to win the first leg of the trade war against the US. The latest statistics are actually shocking for the US Government, with the trade deficit with China at its highest historical level. These figures – that show a Chinese surplus of more than 37 billion dollars for the month of September,…
A precarious euro in a Europe with no ambition
November 8, 2018The dollar has been an integral part of America’s foreign policy for decades. Much more than the currency of reference for global trade, greatly surpassing the privileged status of reserve currency for the central banks, the Greenback is the supreme arbiter. With the simple press of a button, the US can refuse access for any…
Welcome to the worst of worlds
October 31, 2018How could we not recall the British cult TV series from the ‘60s, The Prisoner, where a giant bubble frantically pursued the hero played by Patrick McGoohan? Our world now finds itself in a similar situation: we are all hostages to the now-plentiful bubbles, and not only the speculative bubbles that infect our markets. It’s…
Keynes’s shadow is looming over Brexit
October 27, 2018“When the facts change, I change my mind”: this was one of Keynes’s maxims that became an established way of thinking. What would his attitude to Brexit have been? For or against it, he would nonetheless have been part of the negotiations to try and extract the best agreement possible, despite the strongly unfavourable conditions…
1929, 2008, and 2019?
October 9, 2018Why get worried about exaggerations – aberrations even – over current stock market prices when the American index of reference, the S&P 500, is only showing drops in the way of 1%? While US public debt is reaching astronomical heights of nearly 22 trillion dollars and while companies listed on this S&P 500 index have…
Longing for a lie-in
October 2, 2018Employment is not an end in itself. It just allows us to subsist. This is why it’s productive jobs we need today: ones that will allow us to consume goods and services produced with minimal human labour or effort involved. In my opinion, economic development and prosperity should above all tend to gradually reduce the…
Trade war, or American self-sabotage?
September 26, 2018Donald Trump is actively preparing phase 3 of his retaliation plan against China now that the latter has just reacted to his last wave that came into force this week. According to his own statements summarising his approach to China, he began by imposing an extra tax of 50 billion dollars on the country for…
Has capitalism become obscene ?
September 20, 2018Wealth and income distribution have become grotesque in our Western nations. Collusion between political and economic powers has now become obvious, and it is of public notoriety that employment is nothing more than an adjustable variable in today’s capitalism. The tacit and consensual agreement on which our prosperity has been built thus far is crumbling…
Iran is losing but it is far from checkmate
September 12, 2018Has the Iranian rial lost more than half of its value against the dollar since the start of this year? It’s routine for this country’s economy that has seen this same thing other times as, since the end of the Iraq war, each Iranian president has effectively been faced with a monetary crisis. From 1989…
Saudi Arabia is losing what’s left of its credibility
September 4, 2018The Saudis’ decision to suspend indefinitely the sensationally announced sale of 5% of the national oil company, Aramco, has called the credibility of the Prince, Mohammed bin Salman, directly into question. The offering of this giant on the stock market was in fact the cornerstone of the Prince’s politics, hoping to diversify his Kingdom’s…
Desperately seeking $ !
August 28, 2018Since last January, interest rate hikes have accelerated throughout the world. It’s simple: we might have returned to the pre-Lehman average rate level, according to a Bank of America Merrill Lynch study! It’s not surprising that, in such a situation, global cash is drying up internationally since it goes without saying that such a tightening…
Are we all complicit in globalisation?
June 25, 2018Milton Friedman maintained the theory that unfettered free trade would generate – in the long term – a wealth that would trickle down over everyone. Contrary to the ideas made out, the liberalisation of trade (which goes hand in hand with the free circulation of capital) is not the only reason for the world’s dramatic…
If only we were all Japanese!
June 17, 2018Japan is known as much for its smartphones and robots as it is for the implosion of its real estate mega bubble nearly twenty years before the subprime crisis in the US in 2007, which itself preceded the collapse of the Spanish and Irish real estate markets in 2009. In fact, the Japanese financial and…
Make America 1929 Again
June 5, 2018During his election campaign, Trump never stopped waxing lyrical about China who he stigmatised for all types of wrongdoing, citing high levels of damage to American interests due to unfair business practices. However, a year after being elected, it’s against his closest allies – Canada and Europe – that Trump is raging, all the while…
Europe is sick with Germany
May 28, 2018My intention here is not to fall into caricaturisation or outrage, but Germany is now being governed a bit like Ceausescu’s Romania. Just before being overthrown, he managed to run up a surplus in the way of 9 billion dollars on his country’s balance of payments, just like how Olaf Scholz, the new German Minister…
Qatar & Saudi Arabia: a cold peace
April 22, 2018According to statements made by the then President of Yemen, Ali Abdullah Saleh, “Qatar has too much money”. In fact, only the insiders were familiar with this Emirate prior to the 1990s, even though the little State has distinguished itself as the richest in the world per capita thanks to the proliferation of its oil…
German prosperity: a nightmare for 40% of its citizens
April 12, 2018The German economic miracle has its dark side, demonstrated by a massive budget surplus of 1.2% of GDP – that being 38.2 billion euros in 2017 – that’s causing the country’s infrastructure to tumble, which is now the worst infrastructure of all the rich and industrialised nations. Germany’s disproportionate public saving is causing under-investment within…
Our voluntary submission to GAFA
April 4, 2018The GAFA companies and their consorts have become very powerful across the globe. They are now so present in, and indispensable to, our daily lives that they are competing with governments. The European Union, and even Trump’s United States, are fully aware of this and we are now participating, stunned, in the first outbursts of…
The Saudi blockade: a blessing for Qatar?
March 26, 2018Qatar is an island. At least, it has become one, but not without gradually forging new alliances and trade routes that will influence the balances in the Middle East in the long term. This is how, more than nine months after feeling the wrath of Saudi Arabia, Qatar has now come to circumvent the embargo…
Finance and stock markets: more and more, higher and higher!
March 1, 2018Is the Federal Reserve kick-starting a cycle of interest rate hikes? Are the European Central Bank and Bank of Japan – also – imminently about to announce the end of their monetary creation? Never you mind, because no one will mention that the euphoria of financial markets and irrational stock market take-offs have had their…
1929, 1987, 2000, 2007 and 2018: haven’t we learned anything?
February 14, 2018Notwithstanding the drastic adjustment to the stock markets in the way of 10%, the world’s biggest economy, the one that’s always ahead of everyone else in growth and also depression, the one that serves as the ultimate example of neoliberalism – America – has made a spectacular recovery since the 2007-08 crisis. With its property…
These technology giants, upending our economic fundamentals
February 7, 2018Up until the mid-1970s, full employment and rising wages coincided perfectly with the interests of big-time capitalism. It allowed for consumption and therefore production to increase exponentially, mostly to the benefit of industry leaders. These constantly increasing salaries also had a very positive impact, albeit indirect, in driving technological research forward. The objective of this…
Money, money. Without it all is lost.
January 29, 2018There are barely any people who really understand the concept of “short selling” a position. However, we all partake in short selling. Our credit card expenditures, our mortgages and credit lines, are all instances of short selling in that we borrow money – meaning that we’re in debt – until the loan is repaid by…
Bitcoin: the utopian conspiracy
January 16, 2018As they say, Bitcoin might well be our future. It would allow us to get richer just by having it, and we would be able to transfer it anywhere in the world for free. We would never depend on governments again, banks even less so, and we would no longer be subject to our politicians’…
The Netherlands: the Holy Grail of tax evasion!
January 7, 2018Is it Bermuda? The Cayman Islands? The Channel Islands? Luxembourg? You’re getting warmer… It is in fact the land of tulips and windmills, the home of the International Court of Justice, and the tax haven of choice for American multinationals. 6 July 2005 was in fact the date that the tax evasion orgies began in…
Embracing globalisation, and curbing it
November 24, 2017The populist alternative is not the right one when it comes to calming the distressed middle classes of the West. In terms of responses and solutions, it would be much more gracious to restore their income and purchasing power. In fact, our middle classes have only benefited from the very fringes of globalisation, whereas it’s…
Where have the companies of yesteryear gone?
November 15, 2017Do stock markets still play their traditional role in the economy? Subsidiary question: do businesses make use of stock markets to fund and invest in improvements to their productivity? The response to these two questions must be negative since the shareholders of yesterday have now simply become speculators! Whereas conventional wisdom have wished for sums…
Capitalism doth owe it all to the Reformation
November 7, 2017The Reformation is five centuries old. It transformed Europe’s economy and greatly contributed to the Western world’s dominance over morals, culture and resources. Its rise was a tipping point for the West, whose gains in wealth and development were inversely proportional to the influence of the Catholic Church which had been beaten into submission, at…
Gresham’s law
October 28, 2017In economics, the bad always drives out the good. This is the main point of the law derived by Gresham, a financial advisor to Elizabeth I during the 16th century. At the time, in England and elsewhere, silver coins were in circulation but were not of equal purity. Consumers and retailers would greedily keep hold…
Hyman Minsky, the clairvoyant black sheep
October 17, 2017Deceased in 1996, Hyman Minsky was an economist who was barely known at all during his lifetime. Only certain enlightened minds – unorthodox ones, of course – were interested in his research which focused on the causes of financial crises. He owed his hour of glory to the subprime implosion in 2007 and it’s as…
Is work still valuable? Does it still have value?
October 9, 2017Trade and, more generally, cross-border transactions between nations have considerably improved our living conditions. But what would we do without trade? In other words, if we had to do everything ourselves without calling on other lines of work, other companies and other nations offering specialisations that are barely available in our country? One experiment on…
Public debt and fake news
September 18, 2017Over the course of its history, the United States of America has seen six episodes of budget surplus. Five of them were immediately followed by depressions. Let us never forget that the orthodoxy – already powerful at the time – had pushed President Herbert Hoover to maintain a budget surplus in 1930, the year of…
Hurricane Irma: welcome to a world of inequality
September 12, 2017The ravages of hurricane Irma are huge and barely imaginable, as islands like Antigua and Barbuda have been destroyed by more than 90%. Nowadays, alas, inequalities can take on multiple forms. Like poor allocation of resources, constantly depreciating income from work, precarious employment, the dismantling of the State leaving the poor with no protection, and…
Life beyond capitalism
August 12, 2017The economy is no longer a job supplier. This paradigm has now come to pass because, in the era of globalisation and the financialisation of our economies, growth no longer goes hand in hand with honourable and fairly paid work but for a minority. The subprime crisis came about fundamentally due to huge loans given…
Qatar versus Saudi Arabia: David and Goliath
July 19, 2017Qatar’s real crime? Having led a foreign policy at complete odds with that of the other Gulf nations. Things had been seriously flaring up between these different emirates (and Saudi Arabia) under the reign of the last Prince Hamad bin Khalifa Al Thani, who came to power in 1995. Then, the (unfounded) hopes that Hamad…
How can rentiers be euthanised without massacring the middle class?
July 13, 2017Today, 500 million people live under the regime of negative rates. Is it the beginning of a new era where it will be commonplace for the yield on sovereign debts to be negative? In other words, where governments from the right, left and centre will finance their public debt at negative rates, and investors will…
Women’s rights: still far off from the final battle
July 4, 2017The work women carry out in the household is not remunerated or financially compensated. In fact, this mass of work provided by women in the home with their family is not even evaluated; it isn’t at all! As if they don’t formally get up and go to their places of work every morning, to do…
Where have the bankruptcies of yesteryear gone?
June 28, 2017Adam Smith said it: governments never pay back their debts. Owing to the industrialisation, modernisation, and globalisation of economies, the private sector has also joined the public sector in rarely paying back its debts. Throughout the history of governments – and history itself – defaulting on payment was a sort of smaller common denominator which…
No economic recovery without political courage
June 20, 2017Seven years of growth, and three rates rises in a few months. But the US economy is nevertheless at the dawning of a recession! In spite of the monetary policy which seems to be on its way to normalisation, interest rates will never be – when the next, imminent crisis comes about – at levels…
Leaving the euro would be a coup d’état!
April 27, 2017Let us not forget the convulsive shocks brought on by Italy and Great Britain who were forced to leave the EMS in 1992. Since it was then merely a matter of abandoning a monetary regime, it goes without saying that one of the member-states leaving the euro would have an otherwise much more immediate and…
The Soviet and European Unions: same lies, same destiny
April 4, 2017The parallels between the European Union of 2017 and the Soviet Union of 1989 are troubling. Didn’t these two systems pride themselves on being “apolitical”, meaning that they were led by a technocratic elite that was detached from real life and “real people”? Faced with economic stagnation, didn’t these two systems react by calling on…
The politics of paralysed puppets
March 28, 2017Globalisation didn’t force States to implement divisive public policies which have exacerbated inequalities and jammed the social ladder. The choice made by our successive governments to enact massive deregulation was deliberate, leaving the market as the sole arbiter of individual liberties and as the only generator of wealth and opportunity, albeit too often a source…
The European illusion
March 15, 2017The infamous Treaty of Versailles which was imposed on Germany following the First World War forced the nation to pay the astronomical sum of 132 billion Marks. This iniquitous treaty was to provoke the Occupation of the Ruhr in 1923 by France, displeased at the delays in German payments. In 1924 however, the Dawes Plan,…
The moment of truth for Saudi Arabia and petrodollars
March 4, 2017At the end of the Second World War, the enormous reserves of American gold – the largest in the world at the time – allowed this metal to construct a new world order centred around the dollar. The Bretton Woods Conference held in 1944 formalised the consecration of the greenback, around which all other currencies…
A Germany living on borrowed time
February 18, 2017The narrow-minded attitude of the Germans with regards to austerity, currency and money in general is totally counterproductive in Europe’s current situation. There is nevertheless one certainty: they are sincere! In fact, Germany’s behaviour can only be understood in relation to its at the very least tormented history. Wasn’t bread worth 400 billion marks in…
We are not all equal in the eyes of justice
January 21, 2017Might justice – or rather the deficiencies of justice – be about to destabilise the economic and financial system? Haven’t you noticed how the bosses of small businesses are ruthlessly pursued – sometimes to the point of harassment – while criminal justice scrambles to find legal justifications and motives when it has to deal with…
Back to the Deutschmark
January 6, 2017The staunchly anti-European Martin Feldstein, a Harvard economist, wrote prophetically in 1997 that the introduction of the euro would exacerbate economic cycles by aggravating unemployment in certain member-states. Whose economic problems would contribute to a crisis in confidence in the Union. In fact, those who were convinced that the Union had been suffering a crisis…
The central bank of the 21st century
December 17, 2016Central banks hold the key to our economic recovery since they can afford to create money in unlimited quantities, without ever fearing bankruptcy. While they don’t do it deliberately to relaunch growth, it is true that – in their defense – they weren’t founded to regulate public consumption. Their raison d’être has historically been to…