Humphrey Percy Chairman and FounderMon 16 Oct 2023
While it has not been hard to disagree with JPMorgan CEO, Jamie Dimon on occasion since he is by inclination a prolific pronouncer, this time he is spot on: the world is faced with the most dangerous combination of challenges for several decades with the wars in Ukraine and In Israel. That in turn is likely to give rise to higher food prices and higher oil prices which will make the job of the Central Banks to bring down inflation harder still.
A few stories over the weekend postulating that due to Russia effectively adopting the Yuan for many of its trade transactions due to the rouble and Russian banks being embargoed, that the Yuan also due to further political disillusionment of Gen Z in the USA, could become the reserve currency of choice for the world. there are quite a few flaws in that argument: firstly a global reserve currency has to be undoubted and has to be of a size and heft that makes people content to hold it: strike one against the Yuan. Secondly the Yuan has been one of the world’s worst performing currencies in 2023 due to it not meeting those criteria: strike two against the Yuan. Thirdly those proponents of the Yuan say that it is now at 4% of all global transactions where the USD was in the 1950’s: simply not true, as in the 1950’s in those post WW2 years, USD was universally accepted and furthermore was the currency that many other currencies including GBP was pegged against. Strike three against the Yuan which does not enjoy that peg status. Incidentally 88% of all global foreign exchange transactions are against USD. For that reason, it IS in fact likely that the USD will decline in significance over the next two or three decades, but it will not be supplanted by the Yuan any time soon.
Seemingly it appeared inconceivable that the Australian Referendum dubbed the Voice could not do anything but be resoundingly supported since it would have given indigenous Australian people a platform after so long without one. However the opposition to the referendum managed to translate that into such a result would have made some minority groups more equal than others and obviously some less. Too hard was the conclusion and Australia kicked it out.
Somewhat improbably the far from romantically tailored and full figured US singer Meatloaf released a song called I’d Do Anything For Love which this day in 1993 went to the top of the charts and has become a firm favorite at any self respecting rowdy party:
Some days it don’t come easy Some days it don’t come hard Some days it don’t come at all And these are the days that never end
Some nights you’re breathing fire Some nights you’re carved in ice Some nights you’re like nothing I’ve ever Seen before or will again
Maybe I’m crazy, but it’s crazy and it’s true I know you can save me, no-one else can save me now but you
As long as the wheels are turning As long as the bays are burning As long as your dreams are coming true You’d better believe it
I would do anything for love I know it’s true and that’s a fact I would do anything for love And there’ll never be no turning back
But I’ll never do it better than I do it with you So long, so long And I would do anything for love Oh, I would do anything for love I would do anything for love but I won’t do that I won’t do that
I would do anything for love Anything you’ve been dreaming of, but I just won’t do that I would do anything for love Anything you’ve been dreaming of, but I just won’t do that
Discussion and Analysis by Humphrey Percy, Chairman and Founder
British Pound There really was something for everyone in Bank of England Governor Bailey’s comments yesterday. Firstly he said that the BoE was comfortable with the market’s view of the decline in UK interest rates -meaning one presumes both on extent and timing. Then he followed it up by saying that the UK labour market […]
EU Commission Instead of November’s EU growth forecast of 1.2%, the EU Commission has revised back its prediction to 0.8% for the growth in the gross domestic product of the 20 countries. The 2025 year however will see growth of 1.5%. Back to 2024, it is difficult for the EU bloc to grow much when […]
Germany With the German IFO or Business Climate Index down from 90.10 a year ago to its current level of 85.20, Germany’s business leaders are more realistic about the outlook for Europe’s largest economy than their political leaders. Chancellor Scholz wisely passed the speech making duties yesterday to one of his cohorts who managed with […]