So I’m back.
It’s been a very busy period for me and every time I have thought about sharing my thoughts I’ve found myself asking the inevitable question “what is the point?”
Everything is so predictably bleak at the moment that there seemed little point in covering it. Europe’s debt crisis rolls on and its politics is increasingly fractured, “growth” has slowed and there’s been yet another scandal of a Wall Street firm (JP Morgan this time) losing multiple billions of dollars in a supposedly risk-free part of their business. It is all just too absurd.
In fact the only surprise so far has been that the Fed hasn’t stepped in and blitzed the market with QE3. I wondered in my most recent posts whether or not this had anything to do with the upcoming Presidential Election.
Now that Mitt Romney has been all but confirmed as Obama’s opponent, this has become another non-event. Obama shouldn’t have too much trouble seeing off Romney, the man who was barely able to convince his own party to support him, in what was essentially a one horse race. Politically this probably frees the Fed to start QE3, but they still haven’t moved.
It is highly unlikely that they have seen the error of their ways. Bernanke is locked into the strategy of monetary easing. He simply cannot change track now or his tenure at the helm of the Fed is over. And as we all now know the primacy of position matters above all else. Once in power you desperately cling onto it, try to revive the status quo and wilfully ignore the overwhelming evidence, which tells you society desperately needs to change.
In giving Sarkozy the boot, the French clearly demanded change, but let’s wait and see how many of his promises Hollande will make good on. I am sure I will return at some point to wondering what Obama might do in his second term, although I doubt any of the establishment truly has it in them to enact the reform that is urgently needed.
No, I’m afraid the system will have to fail first before we can hope for anything better. (As an aside please remember I see this as a great opportunity for all, so please don’t think me too pessimistic).
And fail it surely will. As ever the only question, which remains, is when? Continue reading