Posts tagged ageing
Eulogy for a cycle

This essay is full of contradictions and loose ends, so I might as well start with one in the title. This cycle is not over yet, and I am not sure that I have the definitive answer for when it will end. It is, however, well advanced with some themes and narratives. I am writing this in an attempt to make sense of and to explain, a world, which to my despair is increasingly devoid of reason. As a finance geek, I can’t get anywhere without first establishing the state of play in the economy and markets. The most salient feature since the financial crisis has been the unprecedented activism of monetary policy. In 2006, Alan Blinder described central banking in the 21st century. It is a brilliant paper but in dire need of an update given actions taken by policymakers since 2008.  Central bankers were first called into action to prevent a collapse. The destruction in markets after Lehman’s failure showed that timidity or firmness in the face of moral hazard risk was impossible. Interbank markets were seizing up, banks were running out of liquidity, and the chaos quickly was spreading to the real economy.  Decisive action was needed to avoid the situation spiralling out of control. Central banks had to take their role as lenders of last resort seriously.

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Manipulate This - What Really Drives Global Capital Flows

I am generally a tolerant guy, but when it comes to a debate on international capital flows I am a raving lunatic. I have no time for amateurs, and it is my clear impression that president Trump’s trade advisors, and those who agree with them, are just that. You need to understand where I am coming from, though. Specifically, you need to read my two essays about QE, population ageing and the global paradox of thrift. Here is a summary if you don’t want to read the whole thing; read it carefully.

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