Obama wears flares to latest G20 fashion parade, but he may be ahead of his time
28 Jun 2010 [0 Comments | 317 views]
David Cameron reckons these G20 jaunts are a waste of time. Judging by the latest attempt to present unity when actually there is profound disagreement, you can understand our PM’s reservations. The reason why this column is a fan of the G20 meetings has little to do with economics. Churchill, a man whose economic judgement [...]
Deflation descends on the US
18 Jun 2010 [0 Comments | 614 views]
During the noughties we saw two conflicting forces. Globalisation led to rises in commodity prices, and in asset prices such as property. But for manufactured goods, especially high tech products, inflation was either modest, or even negative. The latest data from the US had the headline consumer price index falling by 0.2 per cent in [...]
Inflation stirs
3 Jun 2010 [0 Comments | 348 views]
As you know, this column doesn’t pitch its tent in the inflation scare camp. For some time now it has been argued here that globally there is surplus capacity, and the real challenge facing the global economy is getting demand to match potential supply. We have also argued there are much stronger parallels between the [...]
Up rates to 3.5%, says ‘mad’ OECD
27 May 2010 [0 Comments | 664 views]
Yesterday, the latest OECD Economic Outlook report was released. If you dig deep into the report, you finally come across a recommendation for the UK that, if applied, would wreak economic havoc across the land. Earlier this week the OECD issued another report predicting economic crisis as a result of measures taken by governments to [...]
Rift opens in heart of Bank of England as US inflation falls to 44-year low
20 May 2010 [0 Comments | 431 views]
The release of the latest minutes from the Bank of England Monetary Policy Committee revealed the emergence of a new Rift Valley at the heart of the bank’s rate setting committee. On one side sit the doves, on the other the hawks, and the gap between them is growing. Meanwhile, economists and the blogosphere greet [...]
Is UK set to go the way of the Weimar Republic?
22 Mar 2010 [2 Comments | 685 views]
Predictions that the UK could be set to go the way of the Weimar Republic of Germany in the early 1920s are reaching a new fever pitch. You will no doubt recall from your history books that in Germany between 1914 and 1923, inflation went off the map. Give the German wholesale prices index a [...]
US money supply contracts like a boa constrictor
16 Mar 2010 [1 Comment | 896 views]
Chinese Premier Wen Jiabao has missed the point. Those who say that loose monetary policy in the US will lead to inflation miss it too. Right now, the US economy is facing its severest test in decades, if not longer. The media and the blogosphere are full of predictions of doom. And they have got [...]
Food inflation falls to three-year low
3 Mar 2010 [0 Comments | 256 views]
At last some good news on our affordability. The annual rate of food inflation dropped from 2.9 per cent in January to just 1.3 per cent last month. That’s the lowest annual rate in three years, or so says data from the British Retail Consortium. A year ago, the annual rate was seven times higher. [...]
If money grew on trees, we would be in the midst of deforestation
1 Feb 2010 [0 Comments | 326 views]
Last month, we were a tad dismissive about inflation. Sure, we knew prices were to set to rise, and sure, even for the next couple of years, commodity prices may well rise further, but the conventional view is that quantitative easing will lead to more money, will lead to inflation and we, well, we just disagreed. [...]
The great saving glut is the real clincher
17 Dec 2009 [0 Comments | 485 views]
Saving is a tricky thing. It may be a good thing for individuals, but for the economy as a whole it may not be such a good idea. There’s a commonly held view that savings have to be high in order to ensure there’s money available for bank lending. This view is simply false. These [...]
