A great quote (I won’t try to attribute it out of risk of embarrassment) is bad generals plan to fight the last war again rather than the next one. We saw Joe Biden “learning the lesson” of having not supplied enough stimulus in the Obama era after the last financial crash, pumping huge stimulus into the US economic system after COVID. In hindsight that magnitude was not only unnecessary, but it fuelled an impending inflation crisis.
Looking forward from where we are now, we risk looking for historical economic precedent to inform on what’s coming next, like comparing now to the 1970’s. We’ve never had a great resignation (cause debatable), continued Chinese COVID lockdowns and the world’s bread baskets at war in a globalised economy before. We’re pioneering on finding a way out of these crises, so our analysis needs to fit our unique set of circumstances we face today rather than looking to by-gone eras I think.
In my opinion, the reasons markets are not pricing in big future interest rate hikes is because of the high levels of indebtedness. It wouldn’t take much of a rise in interest rates to dampen growth in the eurozone and bring inflation back down.
I see the crux of the inflation issue as how long will it take Moscow and Beijing to make the right political decisions on abandoning the war and zero COVID policies respectfully. Political pride is at stake. Russia is struggling to maintain the war and China is seeing riots in Shanghai. They need to change course. The longer they take, the more inflation spills into wage demands and services costs in western economies and then it becomes embedded.
If a solution come to the Chinese supply-chain issue in particular, then I think we will still have the deflationary pressures we saw before COVID in globalisation and automation, and the inflation uncertainties could rapidly calm down.
Would it be possible for you to discuss the stagflation in the 1970’s at some point?? It would be interesting to hear more about this from both of you, as you experienced it first hand, but also to compare it to our current situation – how similar are they? Also, would be interesting to hear your opinions on the actions of the US administration and how they may/may not have contributed (Nixon administration effectively ending the gold standard, import tariffs, OPEC) and how it was eventually balanced. In any case, thanks a mill for the great content!
I thoroughly enjoyed your podcast and agree with a Russian gas turn off. I thought this report suggests that a more global approach can successfully bring this about in Europe and hasten net zero emissions. Unlike the Johnson government’s hopeless announcement on energy security that will further exacerbate the cost of living crisis, the IEA approach includes the immediate actions including energy saving that is required to quickly address these difficult issues. Let’s also reduce the speed limits on our roads, save energy, improve air quality and cut the annual slaughter of vulnerable road users-we did it in the 1970s. #SlowDown4Ukraine !
Whats your thinking on Robert Watt
Welcome back
Welcome back - you were missed
Great to have ye back lads. Missed the podcast and getting the weekly updates from ye.
Great to have you back lads!
A great quote (I won’t try to attribute it out of risk of embarrassment) is bad generals plan to fight the last war again rather than the next one. We saw Joe Biden “learning the lesson” of having not supplied enough stimulus in the Obama era after the last financial crash, pumping huge stimulus into the US economic system after COVID. In hindsight that magnitude was not only unnecessary, but it fuelled an impending inflation crisis.
Looking forward from where we are now, we risk looking for historical economic precedent to inform on what’s coming next, like comparing now to the 1970’s. We’ve never had a great resignation (cause debatable), continued Chinese COVID lockdowns and the world’s bread baskets at war in a globalised economy before. We’re pioneering on finding a way out of these crises, so our analysis needs to fit our unique set of circumstances we face today rather than looking to by-gone eras I think.
In my opinion, the reasons markets are not pricing in big future interest rate hikes is because of the high levels of indebtedness. It wouldn’t take much of a rise in interest rates to dampen growth in the eurozone and bring inflation back down.
I see the crux of the inflation issue as how long will it take Moscow and Beijing to make the right political decisions on abandoning the war and zero COVID policies respectfully. Political pride is at stake. Russia is struggling to maintain the war and China is seeing riots in Shanghai. They need to change course. The longer they take, the more inflation spills into wage demands and services costs in western economies and then it becomes embedded.
If a solution come to the Chinese supply-chain issue in particular, then I think we will still have the deflationary pressures we saw before COVID in globalisation and automation, and the inflation uncertainties could rapidly calm down.
Welcome back!
Would it be possible for you to discuss the stagflation in the 1970’s at some point?? It would be interesting to hear more about this from both of you, as you experienced it first hand, but also to compare it to our current situation – how similar are they? Also, would be interesting to hear your opinions on the actions of the US administration and how they may/may not have contributed (Nixon administration effectively ending the gold standard, import tariffs, OPEC) and how it was eventually balanced. In any case, thanks a mill for the great content!
I thoroughly enjoyed your podcast and agree with a Russian gas turn off. I thought this report suggests that a more global approach can successfully bring this about in Europe and hasten net zero emissions. Unlike the Johnson government’s hopeless announcement on energy security that will further exacerbate the cost of living crisis, the IEA approach includes the immediate actions including energy saving that is required to quickly address these difficult issues. Let’s also reduce the speed limits on our roads, save energy, improve air quality and cut the annual slaughter of vulnerable road users-we did it in the 1970s. #SlowDown4Ukraine !
https://iea.blob.core.windows.net/assets/c7503b68-528f-44f7-8196-ce0c3aad6030/10PointPlantoReducetheEuropeanUnionsRelianceonRussiaNaturalGasinfographic.pdf