Inflation is now becoming a hot topic once more. But few people, apart from our older generation, have ever experienced high inflation. In an era of digitalisation and cryptocurrencies, is inflation still relevant?
I’m also tired of vilifying central bankers for every fear I have about capital markets. There is more to it than QE-policy distortion. So I’m going to look at what else might be at work and I will avoid trying to call the popping of a bubble this year. That’s my new year resolution.
Demonetisation was a bold move, but it failed in its objectives. It’s also questionable whether it helps speed up India’s journey towards a cashless society. What’s more interesting is if widespread usage of a crypto-currency emerges. But it could mean that black money and terror funding will still continue in India.
The application of blockchain technology feels almost limitless, yet it’s so misunderstood by many. This is a vast and complex subject, but one that could be very important in the way we live our lives in the future.
Technological advances in a competitive environment have the effect of lowering marginal costs. Music has for instance become almost free with streamable services. Data storage has also become cheaper in the new information age. So will the current crop of tech companies evolve into low margin utilities, just like the high-growth electricity industry before it?
GDP alone is a crude measure of economic prowess. It needs to be combined with other measures. I think the US will continue to enjoy it’s position as a global superpower for quite some time into the future.
I don’t think capitalism will end any time soon. And there have been many alternative models that have fail, like communism. But following the the Financial Crisis, surely we should think more carefully about the system we follow, where there are still banks “to big to fail”.
Most governments dislike cash because it’s difficult to tax. It also removes the degree of control they have on their citizen because they can’t easily trace where money is deposited or spent. It can help sustain unregulated black market economies and aid criminal activities. However, eliminating cash could also be a challenge to your own civil liberties.
Furthermore, it remains a powerful and extremely dynamic G7 economy, whose path matters hugely to investors, trading partners and allies. Its capital city, London, remains a global financial centre and provides vital financial infrastructure and services for the whole of Europe. So do we really need to worry about Britain’s future?
Brazil’s market is at least now pricing in the cost of corruption more fully with these recent scandals. The political status quo has also been challenged, which means there is a risk-premium to be earned if you’re patient. In other words, the country still offer fantastic investment opportunities, perhaps even more so than before.
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