A new world….

Tuesday 4th October 2016

In this issue of Money Truths….

  • A new world….
  • The winners….
  • The losers….
  • The challenge ahead….

A new world….

I’ve been banging on about low interest rates – and closely-related issues – for the last few weeks….

I expect you’ve noticed. You probably think I’m a bit of a pointy-head – one of those pipe-smoking pseudo-intellectual types who likes to while away the hours thinking deeply on big floaty ideas and themes….

But I can assure you I’m not. My wife will confirm as much. I can often get quickly out of my depth helping the children with their homework assignments.

But sometimes these big ideas have to be grappled with.

Big ideas like ‘the economy’, that seem only to exist somewhere far removed from reality or in the editorial columns of big newspapers, have this funny habit of filtering down the food chain and making a big impact on the life and prospects of the man in the street.

Interest rates are at an all-time low. The price of money has never been cheaper. And the point I really want to make – and have probably not been clear enough about – is this: low interest rates are here to stay deep into the foreseeable future.Click here to read more

Words, actions & meaning….

Tuesday 27th September 2016

In this issue of Money Truths….

  • Janet Yellen has a bad habit….
  • Mark Carney is afflicted with it too….
  • Words divorced from meaning….
  • What exactly is being managed here?

Janet Yellen has a bad habit….

It’s a funny thing but in the world of money there is frequently a clear disconnect between words put out into the public domain and the attendant actions that follow them….

Take the words of Janet Yellen, for instance. The Chair of the Board of Governors of the Federal Reserve System in America – their equivalent of the Bank of England – has been saying all year that the market can expect an interest rate hike.

The words have seemed reasonable enough. After all, back in December last year she raised interest rates for the first time in 8 years. She appeared to have set the ball rolling.

But the Federal Reserve has not actually raised rates at all during the whole of 2016.

It’s as though Yellen is suffering from a case of the yips. She knows what part of the board she wants to aim at, but doesn’t seem able to let go of the dart….

In May a poor jobs report stayed Yellen’s hand….… Click here to read more

How it looks from here….

Tuesday 20th September 2016

In this issue of Money Truths….

  • Snapshot….
  • The nightmare has not materialized….
  • Nobody knows….
  • Mixed signals….

Snapshot….

Stocks in the UK and in America continue to increase in value or look very expensive depending on whether you’re holding them or thinking about buying them….

The FTSE 100, the FTSE 250, the Dow Jones and the S&P 500 are all at or close to their 10-year-highs.

In the round, it’s not a great time to be buying stocks. It’s probably a much better time to be selling them.

Gold is at altitude too – as high as it’s been since 2013 and not a million miles away from the 20-year high point it hit back in 2011.

Meanwhile the pound, which dropped off one cliff back in 2008 and then another following the referendum in June, continues to struggle against the dollar and the euro. In August the average value of the pound against a basket of currencies was the 4th lowest figure recorded since 1980….

The pound’s relative weakness will have consequences which are yet to play out. Imports will cost more. Consumer purchasing power will be squeezed. But on the upside, exporters are as competitive and as bullish as they’ve been in a long while.… Click here to read more