The world is about to be hit by a demand shock equivalent to 1973’s supply shock. Yet, astonishingly, most commentators remain so focused on central bank activity, that they have completely missed what is happening. Here’s how it is playing out. You may remember the ‘The pH Report‘ forecast in early December that: “Oil prices […]
Chemicals and the Economy
G7 births in 2013 equal Great Depression year of 1933
In 2013, there were fewer births in the G7 countries – responsible for nearly 50% of the global economy – than in any year since the Great Depression year of 1933.* As the chart also shows, 1933 was an exception. Births bounced back immediately afterwards. But the low figure in 2013 is part of the declining trend seen since […]
The China middle class myth moves us closer to protectionism
Believing conventional wisdom can destroy your profits. One example is playing out in the oil market before our eyes. Another example is the myth that China was about to become middle class. Yet income levels always made this impossible: More than 9 out of 10 Chinese earn less than $20/day By comparison, the basic state pension in the UK is 25% higher, at over […]
Why did nobody else forecast that the oil price would collapse?
Brent oil prices closed at $104.71/bbl on Friday 15 August. On the following Monday morning, I published the first post in my Great Unwinding series, arguing that: “The Great Unwinding of the failed stimulus policies since 2008 has now begun…oil markets are starting to follow cotton and other commodities in refocusing on the fundamentals of supply and […]
Oil price fall set to push Japan back into deflation
Could Japan actually go bankrupt at some point in the future? This was the question left hanging in the air after Friday’s panic at the Bank of Japan, when its Governor forced through his new stimulus policy on a 5 – 4 vote. Financial markets’ first reaction was to assume this was a coup de théâtre on […]
US, Japan consumer spend falls, deflation threatens Eurozone
We are now two-thirds of the way through 2014, and critical decisions are looming for companies and investors. Do they give central banks one more chance to stimulate growth? And are they prepared to trust policymakers to avoid a major geopolitical crisis in the Ukraine? Or do they decide that ‘enough is enough’, and that […]
An oil price fall would tip the world into deflation
The blog found it hard to believe, when it started to research for Boom, Gloom and the New Normal, how little information existed on basic facts such as population size and annual births. Some countries such as the UK and Japan have data going back a century. But they are the exceptions: US annual data […]
55 plus – a new market
The blog’s analysis about the inevitability of slowing demand and deflation was warmly received at Euromoney’s latest Global Bond Investors’ Congress. Far fewer of this year’s attendees still believed that central banks could return the Western economy to SuperCycle growth levels. Thus its concept of the 3 Normals received a most enthusiastic response. This week has seen even greater interest develop […]
Bond investors embrace the 3 Normals
Sometimes the blog gets lucky with its timing. That was certainly the case when it spoke to the world’s leading bond investors last week. Just an hour before, they had been shocked by news that US GDP had fallen by 2.9% in Q1, far worse than earlier estimates. And nobody believed the official excuse that […]
ECB gives a figleaf for politicians to hide behind
It is impossible to overstate the seriousness of today’s threat from deflation. Policymakers refuse to accept that demographic change can create an economic impact. Instead, they want to believe that increasing debt can somehow stimulate growth. The Financial Times has kindly headlined the blog’s letter on this subject as its lead letter. June 10, 2014 […]
Jump to page: