In the ever-evolving world of finance, it is the discerning investor who recognises that fiscal policy changes are not merely legislative adjustments but harbingers of new opportunities. The latest UK budget reforms, published last Wednesday by our first ever female Chancellor of the Exchequer, offer much for the astute investor to consider. Initial reactions to […]
In 2008-09 we had a financial crisis; a credit crisis that required immense levels of government intervention in global financial markets. In the case of the UK, this included hundreds of billions of pounds in quantitative easing and an effective elimination of positive interest rates. Several UK banks required direct injections of capital and one
Sovereign Debt Crisis: The economic consequences of COVID-19 Read More »
A few months ago, the thought of Corbyn and his gang of magic money men was genuinely making me wonder whether we’d still have an economy by 2021. Ironically, the ruling Conservative party seem to have gone completely the same way; FREE MONEY FOR ALL! Billions of pounds in furlough money, billions of pounds in
NIRP – Negative Interest Rate Policy. ZIRP – Zero Interest Rate Policy. For around fourty years, bonds have been in a huge bull market with rates falling further and further. For as long as I can remember, the basic formula of lending money has been a simple one; “I lend you money and after an
In part 1 of this series, I covered the ’spectrum’ of how to run an economy; from a full ’free market’ economy to a ’socialist’ utopian central planning model. When government spending gets to a high percentage of GDP (think 45-50% and above) there can be obvious benefits including a highly educated workforce, efficient healthcare,
If you’ve managed to move out from behind your sofa recently and take a peek at the news, you might have noticed an uptick in the number of central banks announcing ’interventions’ to support the UK economy. Further rounds of quantitative easing, rate cuts, loans and grants to small businesses, mortgage and bill ’holidays’ and
The Bank of England is a comparatively modern institution when held against other national banks such as the Bank of Geneva (founded in 1345) or the Bank of Venice (founded in 1157). It was originally conceived by a merchant by the name of William Patterson in 1689 and was incorporated by William the 3rd in
Ever since 2008 the global economy has been experiencing an unprecedented period of low interest rates, but in 2016, the US Federal Reserve began to tentatively increase rates with a view to staving off inflation caused by a decade of cheap and plentiful money supply. In addition, in late 2018, the Fed decided to start
The US Federal Reserve reverses their rate hikes policy Read More »
Stories have recently started appearing in the media that Italy, the third biggest economy in the Eurozone, has successfully passed initial proposals to create a currency alternative to the Euro, it’s current currency of choice. During last year’s elections, the ruling coalition ran on a platform of policies that toyed with the idea of returning
Italy opens proposals for new alternative currency Read More »
A few months ago I wrote an article about the declining standards of debt in issue and how I believe this is going to impact an awful lot of investors that stick with the received wisdom of ‘bonds are safe, equities are risky’. I was therefore interested to read that 2019 is shaping up to
The various news feeds and sources of financial commentary I follow are becoming increasingly vocal about the rising risk of global debt. Starting in early 2018, commentators have been warning that global debt levels are spiraling out of control, possibly leading to a repeat of the 2007/8 financial crisis. Global debt levels are at historic
In a recent article, I made a reference to the price of Amazon shares reaching a ridiculous 150 forecast earnings. The price of a company is an indicator of the market’s confidence in its abilities to generate cash and return this to shareholders. The higher the P/E ratio is, the more confident that investors generally
Have tech valuations lost all semblance of reality? Read More »
If you’ve been following global financial news, you’ll have noticed the increasing wave of emerging market crises that are spreading around the globe. From South Africa to Turkey, Argentina and Venezuela, emerging markets are facing a torrid time. Add Indonesia, Saudi Arabia and China to the list, and what started out as a currency crisis
Browsing the headlines this morning, I spotted an article from an Australian source talking about how one million property owners are about to default on their mortgage payments. Admittedly, I’m not 100% certain how many people are in the Australian mortgage market, but one million defaults sounds like a significant volume to me. The key
The Big Four accountancy firms; KPMG, Deloitte, EY and PwC are the four largest auditors of modern businesses. They also happen to have overseen the major corporate disasters experienced by Tesco and Carillion whilst declaring these companies to be fit to trade and properly financed. Sadly, despite these disasters, there seems to be a closed
