Comments on: Don’t expect the euro’s rally to last http://blogs.reuters.com/anatole-kaletsky/2013/10/31/dont-expect-the-euros-rally-to-last/ Sat, 03 Jan 2015 16:42:55 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: matthewslyman http://blogs.reuters.com/anatole-kaletsky/2013/10/31/dont-expect-the-euros-rally-to-last/#comment-1297 Thu, 07 Nov 2013 22:51:28 +0000 http://blogs.reuters.com/anatole-kaletsky/?p=648#comment-1297 Thank you, Juergen! Your comment is a perfect complement to my own. I returned to write what you have written, and found you had done it better already!
I was just talking with my wife about the 2010 Flash Crash, two hours before I read your comment. I’m seeing a lot of worrying signs in the stock market at the moment such as anecdotal cases of “high-growth” emerging technology stocks being pumped up to high heaven on apparent speculation and then suddenly deflating 30-50% every time actual earnings data are released (despite these high-growth companies BEATING most rational estimates!) Is this normal for this category of stocks & shares, or is this a sign of an unhealthy market awash with fake capital that’s being squeezed out of traditional savings by monetarily induced inflation? What happens when everyone jumps on the loose money bandwagon; will it stop working for the part of the global market that’s been doing well out of this policy? What happens when China decides they don’t want to play this game any more, and gives up supporting their dollar-debt holdings? We need to find a way out of this together, or we’ll ALL be poorer because of it…

I think this man has it right…
http://www.reuters.com/video/2013/11/07/ reuters-tv-central-banks-are-making-a-te rrible-mist?videoId=274443989&videoChann el=118110
We’d better take a coordinated approach to this ongoing crisis, as Gordon Brown has been advocating since the start of it; otherwise I see no way out other than a painful “market correction” with massive collateral damage.

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By: dingodoggie http://blogs.reuters.com/anatole-kaletsky/2013/10/31/dont-expect-the-euros-rally-to-last/#comment-1293 Mon, 04 Nov 2013 13:25:27 +0000 http://blogs.reuters.com/anatole-kaletsky/?p=648#comment-1293 Hello Matthew,

this is called the New Normal… as you say, it is a highly instable situation with counter-intuitive rules, not like Mr. Kaletsky seems to claim, a self-correcting stable one with magic long term currency trends.

As I am, like you, coming from an IT background, I know how easily a wrong code line can crash highly complex systems. Chances are good that this will happen in some way or another for the current economic and currency system in the next few years, in a metaphoric or maybe even direct way.

Problem is, all people I know who are currently thinking about any backup plans if the current one goes wrong, do this on an either outdated base or an highly local one (eg nationalism or survivalism) or both combined.

Juergen Schwarz

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By: matthewslyman http://blogs.reuters.com/anatole-kaletsky/2013/10/31/dont-expect-the-euros-rally-to-last/#comment-1290 Fri, 01 Nov 2013 07:05:38 +0000 http://blogs.reuters.com/anatole-kaletsky/?p=648#comment-1290 Aren’t these precisely the sorts of questions everyone is asking at each turn in the long-term trend?
“Have we really reached bottom/top? Or is this just another little diversion on the long-term trend?”

Sorry to bang this drum again but I’m going to do it because nobody appears to be listening:

IT SEEMS to me that macroeconomics has been behaving very differently over the last 35 years (and particularly over the last five) compared with the previous 35 years.
How can this be? IT’s simple. Economic power is being concentrated in the hands of the few, as never before! The mass closure and boarding up of town-center retail spaces is a symptom of this change: trade arbitration is being monopolized/oligopolized by Apple, Amazon, Microsoft, Ebay and other corporate behemoths who will always be able to offer a 5% discount compared with their shop-front cousins. (Around the corner from us is a carpet shop that’s been struggling for years because of customers who browse/sample in the bricks-and-mortar shop and then buy online by product-code!)

The usual levers of propaganda, politics, monetary and taxation policy appear to have had their effects reversed; relative to our current policy positions, or relative to their traditional “center”. It’s as though the helmsmen of Western economies suddenly found themselves riding a circus bicycle where the steering did the opposite to what they expected. We have found ourselves in a world where structurally high unemployment means that lax monetary policy actually STRENGTHENS currencies!

PLEASE… SOMEBODY… LISTEN…

Matthew Slyman, M.A. (Computer Science), Cambridge University

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