The Mephisto Polka

[This article appeared in edited form in the Epoch Times and also in the Daily Telegraph]

In her recent set-piece testimony before Congress, Janet Yellen made clear that she is determined to repeat the sort of ‘gradualism’ in raising rates that proved so disastrous after the Tech bust. In other words, that she will not so much boil the frog slowly as encourage him to go out and make a further raft of foredoomed, highly-leveraged investment decisions before he realises he’s been cooked.

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Patience, Bund bears! Patience!

No, Mario is NOT about to give up – whatever! China monetary trends might mean the industrial earnings cycle has peaked. US debt levels are still OK, but the low cost is promoting slightly worrisome growth – nor are Tech balance sheets entirely without blemish. Commodities – clueless and friendless.

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17-06-28 M4 No 6

 

Mario’s Squeezy-B

Having already touched upon the UK’s shaky fiscal position, all that really needs to be added, now that the Chancellor has actually delivered his Autumn Statement, is a quick, ‘I told you so!’

The gloomy prospect is thus one of more borrowing, more spending, stealth tax tinkering, an ill-advised switch to industrial intervention, cost-overrun concrete pouring, and even the setting up of a special credit facility for exporters in a country hardly noted for being under-populated with banks and other lending institutions! Continue reading

Time to Get Real

Having just managed to quell a dangerous rebellion among her fellow Committee members, it did not seem the most opportune time for Janet Yellen to start dreaming of the sort of post-war ‘demand management’ that would happily trade a few extra percentage points of price inflation in order to move a little further up the employment axis in that unshakable vision of the Phillips Curve that seems to dominate the modern central banker’s thought processes.

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