Friday, 13 February 2015

Happy Times On Hold

With the American dock workers apparently putting the supply chain for USA retailing and manufacturing at risk, notably in California, it is not surprising that the scientific doom merchants are suggesting that mega droughts in the American West could be coming soon.

Meanwhile, in the East, New York is about to freeze and the bad weather continues in the area.  The traders and bankers are counting the costs and it may add a new dimension to the currency wars that are going on.

Worried experts try to work out what all this might mean and none of them are happy.  In the UK there is talk of negative inflation by economists meaning deflation to the rest of us.  Because of stoked up money flows recently this is very bad news.

Inflation, by discouraging saving is supposed to promote consumption and taking on of long term debt that keeps electors and business happy especially when combined with ultra low rates of interest.

But deflation in real terms is bad news if you are spent out and loaded up with debt.  It will be harder and longer to pay down, if you ever do.  Worse, people may start to save, putting money away instead of buying all that tat and rubbish and the latest gizmo's.

For those with an interest in the more arcane figures, the Baltic Dry Index has gone down and the last time it happened like this we had the crash of 2007/8.  One way of promoting extra spending is to fight a few wars and President Obama is taking advice on when and where.

Given the uncertainties in the Middle East and the somewhat mixed results in those areas in recent decades, the idea of doing something noisy in Eastern Europe is possible.  After all, in the past when an Empire was in trouble it was often that starting a fight in that area might distract attention.

On the other hand, is the EU beginning to wonder about sending in the banking Mafiosa to Greece to exert its authority and help the Germans get all their money back.  It is not only the bank's money, but a lot of EU's better off citizens rushed to buy property in Greece when the going was good.

The British Navy, gawd bless them, with others, seemed to have stopped the piracy emanating from Somalia.  But this was a major source of income, so impoverished Somali's have headed for the Yemen.  This is in collapse along with Syria and Iraq.

This promises major shifts of refugees and others from the area. For them there is really only one way to go.  So they are heading for Europe where the streets are paved with if not gold, then benefits payments and homes.

Like all sensible and rational people they prefer to go where the better choices and facilities are available.  Make your own guesses where that might be.  But the homes part might prove more difficult.

One big bank ready to blow is Frau Merkel's own Deutsche Bank whose liabilities it is said exceed world gross national product.  As you may guess this is on ongoing problem.  Alas, it is not just an EU matter for what many do not know is that this bank has been buying up titles to UK freeholds.

If Deutsche Bank hits the fan then so will much of the UK leasehold sector together with a lot of other very sensitive investment areas notably in energy and its transmission.

Sumer is i'cumin in loudly sing cuckoo.

1 comment:

  1. "Worried experts try to work out what all this might mean and none of them are happy."

    I'm not convinced they know any more than we do. Everything is too complex.