Deflationary Times12th January 2015
Imagine running a business when your selling price plummets by 42% in the course of a year, and you can do absolutely nothing about it. This, when your input prices have risen 6%, or how about 156%? Well some businesses are already facing just that. Such is life if you produce Brent Crude in the UK[1], pay for your supplies in dollars[2], or even worse if your business is based in Russia.[3] Now combine that with reduced access to investment capital to achieve change and less...
A dose of stress for Europe27th October 2014
What do the latest ECB European bank stress tests tell us about the health of our nearby continentals and their economy? They’ve taken a year to work on, and have just been published as 170 pages of the grandly titled “Aggregate Report on the Comprehensive Assessment”, so lets hope the stress of waiting was worth it. Well, the headlines sound OK, with the EU’s banks showing a total capital deficit of just €9.5 billion to meet the latest stress tests. Before the crisis...
The Sheep have Turned13th October 2014
Now that the Scottish have had their say, it has been interesting to review a few headlines. My favourite, from a US website, was “The Sheep Have Bleated”. It makes the point that the majority, whether through positive choice, fear or misunderstanding voted for the apparent security implied by “together is better”. Our democracies have become entranced by the 51% principle, despite the fact that it is only those floating voters at the margin who decide the outcome of most...
Financial Alchemy19th June 2014
Little has changed. Six years after the depth of the financial crisis, our financial alchemy has achieved … not a jot. Our remarkable era of low interest rates, high debts and deficits has become the unremarkable new normal. Yet the media speak is all about employment recovery and asset price recovery (indeed record-breaking peaks in many markets). So has the alchemy worked? Some concerns are raised and shared, from whiffs of interest rate rises to come, London...
Currencies and Borders: Why would the Scots want the Pound?28th April 2014
Just like all full-blooded Englishmen I have a view on Scottish independence. Putting aside my annoyance at Mel Gibson for his inaccurate Hollywood portrayal of history, there has been plenty of justifiable historic animosity. But cross-border raiding seems now to run wholly in the Scots favour, with their elected representatives inappropriately shifting the balance of power in Westminster on solely English issues. This Westminster vote-rigging is not the fault of the Scots, just the...
What happens next?26th January 2014
The apparent suddenness and rapidity of the UK recovery has greatly encouraged those who rely upon sound-bites to sustain their place in society, and has even thrown Mark Carney’s much-vaunted interest rate guidance off course. With the wind apparently set fair even those market bears seem to have joined the consensus in their predictions for the year. But what do the next few years really have in store? Well last week I had the pleasure of dinner with a small gathering of...
2013 Top Ten28th December 2013
Just as a collection of bright ties is a matter of taste, of hits and misses, one year on from the launch of FYI's website its time to highlight the hits that have drawn the most attention. So if you've had neither time nor inclination to wade through the lot, here are the edited highlights of 2013: Economic Blogs: 1st: The Hobbit: Tolkien the Economic Libertarian? Drawing global interest and recommendation. Proving that you can't beat contemporary relevance. 2nd: The Economics...
The Hobbit: The Desolation of Laketown28th December 2013
Fresh from viewing The Hobbit: The Desolation of Smaug, I am struck by my abiding memory of the film. Not the elves, the orcs, nor the mighty dragon. Perhaps harking back to my most popular post of the year, The Hobbit: Tolkien the Economic Libertarian? I was struck by the commentary on the state in a reinforcement of Tolkien's beliefs. As I state in my earlier blog, in a letter to his son in 1995, Tolkien wrote about planning, organization and regimentation being an “ultimately evil...
Life After The State, a guest blog by Dominic Frisby18th November 2013
'Until August 1914 a sensible, law-abiding Englishman could pass through life and hardly notice the existence of the state, beyond the post office and the policeman'. So wrote AJP Taylor as the opening lines of best-selling English History 1914–1945. 19th century Britain was indeed a much more free existence than that of today. You didn't need a passports (you could travel abroad without permission or ID), you could change money without restriction, taxes were paid on a modest scale (8% of...
The Extremist Mainstream8th October 2013
Three decades ago I came across an original Punch cartoon, and bought it. Each publication carried a pen and ink drawing, and the next edition carried the winning reader’s caption. Whilst tastes and appropriateness change, the essence is that 3 patients had escaped from the asylum, but the guards had returned with 13. The lesson is that amongst those of us that claim to be sane many of us are many behaving oddly indeed. Just as the UK’s eccentric Party Political Conference season drew to...