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Robbing Peter to pay Paul, EU style

The European Commission apparently wants to lay its hands on the ECB’s profits. This is a bad and probably unworkable idea and is unlikely to happen. It does highlight the EU’s post-Brexit money problem. According to the Financial Times, the European Commission is considering appropriating the ECB’s profits in order…

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Prepare for central bank regime change

Inflation-targeting independent central banks have a longer history than most CB regimes Market complacency that current regimes will remain is probably too optimistic Most new regimes mooted mean higher, more volatile inflation and thus lower growth Central bank and monetary policy regimes last longer than expected, but also change faster…

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Vanishing US current account deficit would be bad news

There is still confusion about exactly how Mr Trump’s trade war will play out But the US current account deficit is more likely to widen than to narrow If it did narrow, that would be due to very bad news on the growth front The last week has seen what…

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Money data say, replace cautious optimism with guarded pessimism

Over winter, broad money growth in the largest developed markets has slowed down At the same time, the growth of US large time deposits has slumped If maintained, current money trends point to below-trend growth and weaker asset prices In early January we wrote that broad money growth in the…

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Populism Defeated

In spite of recent victories, populism usually fails, mainly because of its inherent contradictions But this does not deal with the underlying causes of populism The liberal order can triumph, but not by attempting to ‘out-populist’ the populists or by treating voters as ignorant fools Previous articles in this series…

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Populism in Practice

In our previous two articles in this series we have considered the phenomenon of populism, how it operates and what gives rise to it, and how the current state of the developed world has led to the current surge in populist parties and policies.  In this article we look at…

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The Causes of Populism

In our article last week we looked at the rise of populism in recent years, and explored what populism is, what typically leads to a populist surge and what some of the consequences for and effects on democracy and the wider society are when politics takes on a populist hue.…

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The Triumph of Populism

Populism has very old roots; and it comes and goes in waves In modern times, populist parties rarely win elections. Their ideas triumph anyway. The populist victories in 2016/17 make this a very unusual time Populism is not the ultimate expression of a democracy. On the contrary, it is a…

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Broad money less supportive of asset prices in 2018

 Broad money growth in all four large advanced economies is healthy, but slowing Crucially, the growth of non-bank financial institutions’ money holdings is subdued Money data point to continued but somewhat less support for assets As we enter into 2018, broad money growth in all major advanced economies is presenting…

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Into a secular bond bear market

Bond markets move in long – secular – cycles, with at least five since the 1870s After a bull market since 1982, we are now likely headed for a multi-decade bear market However, bond yields are unlikely to reach levels seen from the 1970s to the mid-1990s Bond markets, like…

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