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…
Disintegrating Europe
December 6, 2016Europe was founded and edified on the famous principle of the four liberties. Capital, goods, services and work are meant to be able to move without any restriction anywhere in this mercantile Europe. Unlimited competition goes hand in hand with minimum control over the private sector, which together are supposed – according to the irrefutable…
The year zero of Western depression
November 26, 2016Up to the present moment, peace, democratic values and even happiness have been intimately linked to economic growth. It is thus public notoriety that economic depression is the royal path that leads to war, or to extreme and extremist situations and stances in any case. Negative interest rates now seem to be one of the…
Uberising monetary creation
November 16, 2016How can we break free from the dominant ideology which asserts that States are only capable of budgetary discipline if they have to finance themselves via financial markets? Neoliberalism teaches us that market sanctions on lax nations will be exercised in the form of higher interest rates, meant to put spendthrifts back on the right…
Brexit versus globalisation
November 5, 2016Brexit was much more than a British electoral consultation to leave the Union. The issues were actually much more serious – and critical for some – than the relatively anecdotal aspect of a country that had never really integrated into Europe. Despite what had been stigmatised by the partisans of the Remain camp, Brexit was…
Europe is the weak link in the global economy
October 29, 2016Today, the crisis confronts those who delivered Europe to the technocrats, bankers and industrial types who are hardly concerned with a united and social Europe. This crisis is not only financial: it consecrates the failure of the European ultra-liberal model. The Founding Fathers of the ECB will focus all the vital energy of their institution…
The euro and the gold standard
October 23, 2016Well before the creation of the euro, the Canadian, Robert Mundell, was to enumerate the conditions of success for a monetary union. His works won him the Nobel Prize in 1999, precisely the year that the euro was launched. According to Mundell, a currency shared by a large geographic area is only viable when there…
The euro isn’t solvent in growth
October 15, 2016What a shame it is that politicians aren’t historians too! And that it is regrettable for all of us that they aren’t looking back to the year 1931 – a tragedy, among other things – in order to draw parallels and precious lessons for today. Let’s remember the bankruptcy of the very large Austrian bank,…
Capitalism: soon to be a barbaric relic?
October 6, 2016“The great struggles of the twentieth century between liberty and totalitarianism ended with a decisive victory for the forces of freedom—and a single sustainable model for national success: freedom, democracy, and free enterprise. In the twenty-first century, only nations that share a commitment to protecting basic human rights and guaranteeing political and economic freedom will…
Globalisation: R.I.P.
August 10, 2016Globalisation is dead: long live deglobalisation! While Brexit has (fortunately) not been the cataclysm that analysts had so predicted, it is nonetheless the most spectacular manifestation of the end of the reign of globalisation. A revolt against the elites has indeed been brewing – across Western countries – since the crises of the years 2007…
The unsustainable nonchalance of the elites
June 28, 2016Who had predicted or foreseen such a result of this British referendum? Of course, much ink was penned over the last few weeks warning of the consequences and advising caution with regards to reactions from citizens fed up with the technocrats imbued with power and the politicians hooked on it. You see, the status quo…
Brexit, now that’s democracy
June 21, 2016Brexit is not just an electoral consultation that will decide on Britain’s potential departure from the Union. The issues are far more serious – and critical for some – than the relatively by-the-by stance of a country that has never really brought Europe together. Despite what has been stigmatised by the Remain campaign, Brexit is…
Capitalism: soon to be a barbaric relic?
June 6, 2016“The great struggles of the twentieth century between liberty and totalitarianism ended with a decisive victory for the forces of freedom—and a single sustainable model for national success: freedom, democracy, and free enterprise. In the twenty-first century, only nations that share a commitment to protecting basic human rights and guaranteeing political and economic freedom will…
Overcoming the German autocracy
May 29, 2016German households and businesses are clearly creditors and in surplus with regards to countries abroad. As for the German government, its objective is to clear its public debt and run a budget surplus. So why would it now trouble itself with the endemic deceleration of the country’s domestic investment, which has been induced directly by…
The central bank of the 21st century
May 10, 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…
Uberising monetary creation
April 30, 2016How can we break free from the dominant ideology which asserts that States are capable of budgetary discipline only if they have to finance themselves via financial markets? Neoliberalism teaches us that market sanctions on lax nations will be exercised in the form of higher interest rates, meant to put spendthrifts back on the right…
Something’s got to give
April 21, 2016The secular stagnation that is infecting our economies brings with it the germs of instability and financial torment. Since interest rates and monetary creation are the only weapons still at the disposal of the only public institutions that still wield some sort of power in our modern world, their initiation with a view to relaunching…
When real estate threatens growth
April 13, 2016It’s not a coincidence if real estate prices – relatively stable up until now – suffered unhealthy volatility at the dawn of the 1990s. This phenomenon was the direct consequence of integrating the banking and financial systems together because deregulation and innovations such as securitisation intensified the flow of cross-border and transcontinental capital, thus inducing…
Choose your poison
April 7, 2016“The essence of secular stagnation: sick recoveries which die in their infancy and depressions which feed on themselves and leave a hard and seemingly immovable core of unemployment.” It is in these terms that the father of secular stagnation, Alvin Hansen, described to the American Economic Association the economic climate of 1938…which could just as…
Life beyond capitalism
March 21, 2016The 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…
The European social nightmare
March 8, 2016What European social model? Is there only one, when the Germans are more than ever obsessed with competitiveness and their trade surplus? In reality, Merkel and Schauble’s only solution in order to compete with emerging and developing countries – and therefore to preserve Germany’s market shares – consists of crushing southern European workers under an…
The preordained disappearance of cash
February 29, 2016In Sweden, the Church has had to adapt because its followers are carrying less and less cash around with them. It has therefore now become commonplace for churches in places like Stockholm to display their bank details on giant screens during Sunday services, so that church-goers can whip out their phones and make an instant…
Economic Hibernation
February 25, 2016How have we lost our bearings? And why do the right and left – in all Western countries – appear to be applying the same economic policy, with only a few cosmetic nuances in difference? Where are the contentions of old that we used to have and which would pit us against each other? It…
If only the right knew how, or the left was able to
February 19, 2016Negative interest rates appear to be incompatible with our current banking system, because it is the banking institutions which have the most difficulty making profits in an environment of negative rates. It is the very fabric of our economy that has again been shaken as our world sinks further and further into this new paradigm…
Wall Street: how to finish off this vile beast?
February 11, 2016What is the deeper, intimate reason for financial crises? How do cracks appear and why do bubbles implode? It is always for a simple and unique reason, which is that irrational and outlandish bets undertaken by the world of finance are done so with borrowed money! In this regard, the last serious crisis – subprimes…
Oil: victim of deflation
January 30, 2016The collapse in oil prices has not brought with it the happiness that had been counted on, since economic fundamentals have not improved. As for Western consumption, its slight progress is owed more to a further drop in inflation indices than to an increase in salaries and revenues that is worthy of being called so.…
Financial crisis are painfully commonplace
January 25, 2016Blinder is no one than he who refuses to see. The main factors responsible for the torments of these last few years are still at large, when they haven’t been magnified despite declarations coming from the financial community and authorities claiming to be reassuring. According to them, systemic reforms would have in fact been made…