The worst thing about a blog is that once you have said your piece, there is an eternal digital imprint.  I have rashly made a number of predictions this year and not all ended as my forecast supposed!

30th December 2014

Winners and losers in a post QE world where  commodity and other asset prices will go into free fall

Crude benefits of falling oil prices


29th October 2014

What on earth could going wrong in a post QE world - my list of 10 things we know about QE and what will happen next.

Time up for QE

News that a 9 year old girl has shot her shooting instructor must resonate in Japan as all three of  Shinzo Abe's arrows have missed their target and hit him squarely in the backside!  
So my forecast made in 2013 comes good!

Abenomics on the ragged edge


Predicting the failure of Abenomics, which seems to be confirmed by today's FT - 12th August 2014

Austerity's Catch 22

Recovery in advanced countries where high levels of debt have coexisted with negative real interest rates for many years must require increased public spending, tax cuts, QE or other measures that may well, in the medium term, cause interest rates and rise choke off growth.  So, like Yossarian in Catch-22 one can only let out a respectful whistle at the perfect symmetry of our predicament.  To escape this vicious circle of low growth, no growth, etc - there have been two standout tactics and both are a kind of madness, they are:

1.       Abenomics, which begs us to temporarily forget our debts whilst throwing the kitchen sink at reflationary measures.  Before turning to the tricky issue of reducing the debt –the big question is will he need to service the debt drive up interest rates before growth takes hold?
2.       Austerity, which begs us to temporarily forget growth whilst hammering down on public sector debt.  The big question is will shrinking the state reduce demand to a point where lack of confidence in the economy makes it difficult for governments to service their existing debts without increasing yield and interest rates in the debt markets
In many parts of the world there has been a strong desire to step in a “do something” and in most instances this has been the cause of further pain.  The story of austerity in Europe is pretty well known and the likely outcome for Abenomics is becoming more certain (it won’t end well).  

Posted on the 16th December 2013


Posted on the 24th September 2013

......  The politician with most to lose is Ed Balls, who missed the recovery when it was pain for all to see and now is betting the farm on the fact that lower living standards will throw the coalition from power.  My hunch is that by Christmas a large proportion of the private sector workforce will be feeling a lot better off and ready to live it up a little.


Dealing with Syria and the need for support from Russia and Iran

Posted on 16th June and 27th August 2013
Meanwhile with unenviable timing President Barack Obama’s has decided to send unspecified “direct military support” to Syria’s Sunni rebels ramping up the stakes with Shia globally (The Assad Regime is Shia), just at the moment when moderates need encouragement in Iran.  The evidence that has been used to give cover for this active participation (use of poison gas) seems pretty thin and is strangely reminiscent of the ‘weapons of mass destruction’ ruse used in Iraq


Predicting the failure of Abenomics

Posted on 31st May 2013
Economist around the world watch Japan with baited breath, there is much at stake for the both sides of the argument, The Keynesian wing have their fingers tightly crossed hoping that Abenomics will finally  be the solution to kick starting the world third largest economy, that has been moribund for years. Others on the monetarist wing believe that it will end in tears, and it looks like the markets are voting in favour of the monetarist.

Can the Chancellor escape the ignominy of a triple dip recession 

Posted on 14th March 2013
As George Osborne approaches his next budget everyone has a view on what the Chancellor should do revive our economy.  There are only two areas of broad consensus; first that there needs to be a change of direction and second that there needs to be a change of Chancellor.

Where did it all go wrong for George Osborne 

 Posted on 20th March 2013

Harold Macmillan said that he thought Budget Day to be "rather like a school Speech Day: a bit of a bore, but there it is" and I expect fellow toff George Osborne takes a similar view.  As he enjoys a hearty breakfast and takes his throat tablets this morning in preparation for his budget speech (normal about 90 minutes long to a packed and noise House of Commons) George knows that his head is on the block.  Any repeat of last years 'omnishambles' could see him dispatched back home to his Cheshire constituency.. 

Just a week before Wales thumped England by a record margin

Posted on 10th March 2013

So can England win in Cardiff?  Yes, mainly because the Welsh aren't a great side either and man for man England probably shade it.  Obviously Youngs and Farrell must return and we should stick with the front five who started this week.  It's too late to mess with the centre pairing but hopefully Farrell can get more out of Barritt and Tuilagi next week.

Just two months before the consumer driven recovery kicked-in!

Posted on 18th March 2013

Private consumption is the biggest slice of GDP, accounting for a massive 63% in 2012.  It will be impossible to turn the economy around without giving hard pressed consumers (who create a huge proportion of private output) some breathing space. Disposable income has been protected for those on low incomes but this is a tiny proportion of the £1.5 trillion of total consumer spending.  The government’s efforts to tackle the deficit have focused on getting middle income earners and savers to bail out the rest of the country.  These people have been burdened with tax increase, benefit withdrawals, institutionalised inflation in energy and transport and institutionalised deflation in savings income.  The net result is that the UK’s engine room for growth is flat on its back and in need of some intensive care

One I did get right – actually I cribbed it from Gavyn Davis

Posted 6th Jan 2013

Gavyn Davies used the chart below to explain how The US, now using a similar strategy to the UK (spend cuts and quantitative easing) may do better than us.  Mainly because private individuals and business are starting to relax their financial balances in favour of more debt.

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