The Inflation Enigma

WEEKLY COMMENT 12-10-2017

By Barry Edwards

The Inflation Enigma

 

There has been a lot of discussion recently by economists and commentators about inflation and why it is not reacting as the current economic models predict. As the IMF gather in Washington for their annual meeting, this subject has become the main topic for finance ministers and central bankers who usually attend this event. The economic theory that has been the basis for managing an economy is about 30 years old and since the financial crisis in 2007/8 it has not performed according to the model making it difficult to predict how an economy will react in the next year or so. read more

Alternative Party Policies

WEEKLY COMMENT 5-10-2017

By Barry Edwards

Alternative Party Policies

The party political conferences finished this week with the Conservatives setting out their agenda for the country which was not especially exciting. The main themes for all the parties seem to be infrastructure investment, tuition fees, social housing and social care with the proposal to nationalise all utilities from Labour. All of them claim that their policies are fully costed within the national budget and the nationalisation will be funded by issuing government bonds. Most commentators were unimpressed and believe that the funding will not materialise from tax revenue leaving most of the policies unimplemented or possibly only partially achieved. read more

EU Problems Ahead

WEEKLY COMMENT 28-09-2017

By Barry Edwards

EU Problems Ahead

An interesting short paper was posted by the Cobden centre entitled ‘The forthcoming global crisis`. It is about the likelihood of a recession happening in the next eighteen months and it explains why they believe it could be caused by the sudden rise of interest rates in the Eurozone. The Cobden Centre is a British independent educational charity founded formally to undertake research into economic and political science and to disseminate the results thereof and to advance the education of the public in economic and political science. If you click on the link below you can read the paper, it is about 7-8 pages;

http://www.cobdencentre.org/2017/09/the-forthcoming-global-crisis/?t=1&cn=ZmxleGlibGVfcmVjc18y&refsrc=email&iid=b122b1720f2540d2aa7b0ddd10ef9776&uid=733109551&nid=244+272699400 read more

Eurozone Integration

WEEKLY COMMENT 14-09-2017

By Barry Edwards

Eurozone Integration

This week we have had the ‘State of the Union’ speech from Jean-Claude Juncker and a statement from the French finance minister Bruno Le Maire at the gathering of finance ministers in Tallinn, the Estonian capital, that Paris and Berlin would push through an overhaul of the Eurozone.

The Juncker speech was a typical federalist approach with some solid suggestions that were well received but most reactions were that most of it would not happen. It comes as no surprise to anyone that the real power lies firmly in the hands of France and Germany with the main thrust for now coming from President Macron. Angela Merkel has made it known that she is willing to go along with some of the French plans but while the German election is still pending the commitment is to be confirmed after the 24th of September. read more

New Writer for BEA

 New Writer for BEA

 

It is with great pleasure that I introduce a new writer to Barry Edwards and Associates (BEA) this week. His name is Rob Thomas and he has many years of experience in the field of mortgages and property funding and you can read his profile under the ‘About Us’ menu at the top of the page which explains his business activities in more detail. During his early career Rob spent some time as an economist at the Bank of England which gave him the experience to write a report about central banks entitled ‘Unconventional monetary policy explored-The case for replacing QE with a sovereign wealth fund’. read more

National Equity

WEEKLY COMMENT 31-08-2017

By Barry Edwards

National Equity

A new concept has been put forward by Richard Murphy of the Tax Research blog about establishing equity capital for countries to be invested in infrastructure and other important requirements to develop and support the nation as a whole. The basis of the idea is that the central bank creates money similar to the quantitative easing policy but instead of issuing bonds which the central bank buys, an equity fund is established and is used on behalf of the nation as described above. read more

A European Future

WEEKLY COMMENT 24-08-2017

By Barry Edwards

A European Future

The European Union’s web based network EUROACTIV reported this week that German Finance Minister Wolfgang Schäuble is working on a proposal that would allow southern Eurozone countries to tap into the single currency bloc’s bailout fund to boost investments during recessions. The plan would mark a major change of policy for Schäuble who had until recently always opposed transfers from richer Eurozone countries to poorer members like Greece. read more

Government Stimulus

WEEKLY COMMENT 17-08-2017

By Barry Edwards

Government Stimulus

The fog is slowly beginning to lift on the process of Brexit as the British government is gradually releasing papers explaining the approach they would like to take. It appears that a transition period is now generally accepted as a necessity to manage the trading relationship that will eventually transpire. Companies throughout Europe are starting to influence the politicians to accept that it is in their interests and the EU economy to prevent sudden disruption when the UK officially leaves the EU. read more

Financing Investment

WEEKLY COMMENT 10-08-2017

By Barry Edwards

Financing Investment

The Institute for Public Policy Research (IPPR) Commission on Economic Justice has recently published a discussion paper entitled ‘Financing Investment, Reforming finance markets for the long-term’.  The IPPR is a landmark initiative to rethink economic policy for post-Brexit Britain. Launched in November 2016, the Commission brings together leading figures from across society – from business and trade unions, civil society organisations and academia – to examine the challenges facing the UK economy and make practical recommendations for reform. If you click on the link below you can read the paper, it is 35 pages of script and it is well worth reading; read more

CBI Industrial Strategy

WEEKLY COMMENT 27-07-2017

By Barry Edwards

CBI Industrial Strategy

 

The Confederation of British Industry (CBI) has published this week their response to the government’s Industrial Strategy green paper published on 23rd of January 2017. The CBI paper is a very thorough analysis and is a very comprehensive response with recommendations that enhance the discussion and the contribution from their members was impressive.

Since the publication of the green paper, the CBI has consulted with over 500 members, large and small, from different sectors up and down the country. The response was overwhelming – CBI members are extremely supportive of a modern industrial strategy. They agree with the high level goals, and believe the Government has identified the right issues and asked the right questions. The 10 pillars outlined in the green paper were broadly welcomed as the starting point for a transformative industrial strategy. If you click on the link below you can read the CBI response, it is 30 pages long and well worth reading. There is a summary of all the recommendations on page 29; read more

European Banks  

WEEKLY COMMENT 20-07-2017

By Barry Edwards

European Banks

 

There has been a lot of comment this week about European banks and the vast amount of non-performing loans (NPL) that they have accumulated since the financial crisis in 2007/8. The European Commission have been planning to re-awaken the securitisation market to allow some of these NPL’s to be securitised and issued as bonds. However the Commission has ruled that they will not allow self-certified mortgages to be included in these issues which has thrown a spanner in the works. Many of these mortgages prior to the crisis were self-certified as they were in the UK and USA although that has now been disallowed in most countries. read more

Brexit Negotiations

WEEKLY COMMENT 13-07-2017

By Barry Edwards

Brexit Negotiations

The comments and statements coming from politicians and commentators are particularly confusing if you are trying to work out the approach that the government is taking concerning the Brexit negotiations. The only thing that is clear is the fact that politicians from all parties have very different ideas about the outcome they would like to see. It is now fairly obvious that many people and politicians had not really thought deeply about the consequences of Brexit and what it will mean for the country. The appalling debate prior to the referendum clearly demonstrated the lack of understanding about the detail involved in negotiating the final settlement. read more