Back to the deutschemark ?
May 28, 2019Martin Feldstein, a Harvard economist, wrote premonitorily in 1997 that the euro’s introduction “would exacerbate economic cycles by worsening unemployment in certain member states. Such economic woes would contribute to a crisis of confidence in the Union”. In fact, those who were convinced that the Union’s crisis since 2009 would only be a one-off…
The trade war won’t happen!
May 21, 2019China is not a bellicose nation. For it, war is a matter of developing excessive trading relationships. Put another way, for China,the defence of its economic interests is an extension of war. As for its nuclear option in the context of this trade war with the USA, it would be to shed itself of…
Europe’s disgust
May 15, 2019Brexit could have been a simple divorce between the UK and Europe, but the mounting tension between the British Parliament and the European Union is about to turn this separation into a much more deeply profound event. This is because Brexit won’t just have major geopolitical ramifications in modern history. In fact, after France’s…
The zombies of capitalism
May 9, 2019The policy of zero interest rates was crucial in avoiding total financial collapse following the subprime crisis, the credit crunch, and Europe’s sovereign debt psychodrama, just as it will play a major role over the next few episodes of stock market crashes and exacerbated volatility that hurts the real economy. On the other side of…
A major challenge of our time
April 21, 2019Where has inflation gone? While the US enjoys one of its longest periods of economic expansion, and while it is pretty much at full employment with its best figures for fifty years, inflation is nevertheless miniscule. Will it one day make its return to our developed nations of integrated economies?
The Rome syndrome
April 11, 2019The Italians were, for centuries, Europe’s bankers. The Medici’s, for their part, lent extensively to the British and French crowns. Let us not forgetthe marriage – of convenience – between Henry IV and Marie de Medicis, who was also known as “the fat banker’s daughter”. What happened in the second half of the 20th…
Gold, Conservatives and Conspiracy Theory
April 2, 2019Stephen Moore, who was appointed by Donald Trump to the board of governors of the US Federal Reserve, is one of those who sees gold as the ultimate refuge. He has just stated that yellow metal prices are expected to rise to $ 2,000 an ounce and that any prudent investor should maintain a…
Brexit is a chance for Europe
March 26, 2019The chaos that’s shaking Britain to its core has come a long distance. The constitutional crisis, the 2 million protesters in the streets of London on Saturday 23rd March, the likely fall of Theresa May this week, and even the 2016 referendum itself are merely the culmination of more than 40 years of turbulence between…
Debt, money, sin
March 20, 2019The word for ‘debt’ in German – to owe money – is ‘Schuld’, and it also means ‘sin’ in this language. This dual meaning also existed in Akkadian in Babylon. In fact, it’s a Babylonian sovereign, Hammurabi, who in 1792 BC was the first to set up a veritable system of debt-renouncement that entailed…
To cleanse Europe, dismantle the Stability Pact!
March 12, 2019Europe’s not out of danger yet. A meltdown is still on the cards due to the eurozone members’ lack of any control over their interest rates and currency. In fact, in these conditions, how can diverse national economies using the euro not diverge? And what would be the instrument that could harmonise consumption and economic…
The future of Europe is going through a rehabilitation of its experts
March 4, 2019Growth since 2009: China +139%, India +96%, the US +34%, Europe –2%. These figures tell the story of the European Union’s spiralling macroeconomic decline. The lack of reactivity of our public policies, in the aftermath of the financial crisis, led to a reduction in imports, with the most hard-hit eurozone countries seeing their balance of…
German ordoliberalism versus French Etatism
February 20, 2019If a referendum was to be organised in France off the back of a widescale national debate, and if President Macron really wanted to bring the country closer to a politics that clearly favoured growth and therefore buying power, the vote would have to centre around EU regulations on public deficits and on changing the…
What the Ghosn affair tells us about Japan’s judicial system
January 28, 2019It was a mere fifty days that Carlos Ghosn had been detained, starting 19th November 2018, when he was finally allowed to appear – at his request! – before the Court in Tokyo on 8th January 2019, chained to a policeman by the waist and wearing green plastic sandals. Eight weeks had to pass for…
BOB = Bored of Brexit
January 22, 2019As“Brexit fatigue”takes hold of us, let’s look back over the terminology relating to it. While “soft Brexit” means the UK staying in the single market according to the “Norway model”, “hard Brexit” means exiting the EU with no agreement in place but then signing a trade deal, known as the “Canada model”. However, it’s only…
Would the West accept being saved by Islamic finance?
January 19, 2019The Nobel prize winner for economics, Eugene Fama, born in 1939 and one of the fathers of monetarism and the neoliberal ideology, is known for having pre-emptively asserted that “the idea of efficient markets is a simple assertion that states that the prices of securities and assets reflect all the information known”. It is in…
The US: a rate cut to come ?
January 5, 2019The US Federal Reserve, as we know, is in the process of “normalising” its monetary policy stance. That means it’s committed to gradually raising its guideline rates, after the extreme efforts during the finance crisis that led to quantitative easing. After increasing its rates four times in 2018, it has just announced two or three…
Brexit is populist – and farewell 2018!
December 21, 20182018 wasn’t a vintage year. In fact, I’d be more tempted to call it a year of gloom and doom. Trade wars, stalling stock markets, extreme oil price volatility, geopolitical tensions, con games in the Middle East, and serious questions about Macron’s presidency that had brought some much hope are only a few examples of…
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…