Tag Inflation

What would a Multi-Sigma Bond Slide do to Markets?

The risks of Central Bank policy mistakes are escalating. Fixed Income markets are wising up to the potential of long-term stagflation/inflation. A bond correction will crush stock markets if/when real interest rates turn positive. Central Bankers will need to decide: intervene to save markets – continuing the current distortions, or let loose the dogs of market meltdown. Anyone for the last few choc-ices?

Germany is just a distraction from the real story

Who cares who replaces Angela Merkel? But the likely inability of the ECB to address the consequences of monetary experimentation and inflation in coming years could cause Germany’s coming generation of bland political nobodies to be superseded by something more populist and chaotic, creating all kinds of problems for Yoorp.

Inflation, Covid, Central Banks and Politics – about half the things to really worry about…

As markets shake off their summer slumbers, what should we be worrying about? Lots..! From real vs transitory inflation arguments, the long-term economic consequences of Covid, the future for Central Banking unable to unravel its Gordian knot of monetary experimentation, and the prospects for rising political instability in the US and Europe.

To predict Europe’s future read some Japanese history..

The ECB has tweaked the words and now has low interest rates forever, and a new mandate to “tolerate” higher inflation. What will it achieve? To answer look at the failed 30 year experiment in Japan and the multiple parallels. The outlook for Europe as a global economic and innovative powerhouse looks shaky.

Freedom? Markets and Climate Chaos

Its “Freedom Day” in the UK, but it feels same as, same as. Bond markets look stressed, but freak weather is raising the probability government intervention dwarfing the scale of the pandemic may become necessary. There will not be a gradual, ordered progression to a new higher temperature climate.  Instead… the reality looks like high-cost chaotic freak-weather events becoming increasingly common.  The cost could hit trillions.

Inflation: the next stage of the Global Financial Crisis 2007-2031

What Inflation? “Oh, that’s nothing to worry about, the central banks have no choice but to keep juicing markets”… The market is so focused on the short-term and ignoring the consequences of the last 10 years of QE, monetary experimentation and easy rates, that its blundering into the next crisis. Inflation matters, and has jumped from financial assets into the real economy.

Freedom delayed, momentum stalls, bonds rally and the EU issuance programme kicks off

As the US Fed meets to discuss rates and assess the real inflation threat, the UK Covid-freedom delay is likely to stall recovery momentum and add to the economic pain being felt at the micro-level. Markets are pricing for a transitory inflation bloom, but what is the real inflation outlook and what will it mean for bond markets as the European Union launches Europe’s fully mutualised funding programme – don’t anyone tell the Germans its happened!