The Pride - Issue 5 - Autumn 2021 - Magazine - Page 9
It is now over 200 years since the
beginning of the industrial revolution
and never have more people been
employed in the global economy than
there are today. Driverless cars and
delivery by drone are mere evolutionary
steps. Respective revolutions were
the invention of the wheel and the
development of the postal service.
Deflation, what deflation?
3.5%
UK
3.0%
Eurozone
US
China
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
-0.5%
-1.0%
2012
2013
2014
2015
2016
2017
2018
Source: Bloomberg, Consumer Price Inflation
Growth, solid not spectacular
10%
UK
Eurozone
US
China
8%
6%
4%
2%
0%
-2%
2012
2013
2014
Source: Bloomberg, Gross Domestic Product (real)
2015
2016
2017
2018
Of course, for Central Banks, economic
stabilisation
challenges
prevailing
interest rate and monetary policy.
Now we have a multi-year body of
evidence that “things are okay”, the
need to continue to support financial
asset prices is increasingly being called
into question.
Those looking for reasons why such
support may continue would point to
the challenges of trade wars, of Italian
politics or even Brexit. However, there
is always something for investors or
Central Bankers to worry about. The
latter’s job is to understand the balance
between the positives and negatives,
not to ensure the health and wealth
of every bond or equity investor.
Capitalist markets are founded on the
principle that risk may be rewarded, not
underwritten. Moving from this principle
has already risked destroying the model
by providing a free transfer of wealth
to the current generation from future
generations. Global populist uprisings
owe their origin at least in part to this
wealth transfer.
Issue 2 Winter 2018 - TH E P R IDE - 9