Broomer's Blog

From the monthly archives: December 2015

We are pleased to present below all posts archived in 'December 2015'. If you still can't find what you are looking for, try using the search box.

Outlook Update

The nine day fall in the FTSE100 finally broke on 15th December but surprisingly the natural resource stocks that had led the market lower, continued to lag during the subsequent bounce. This is odd and cannot bode well for the sector. The world has spent a long time adjusting to disinflation, it may take time to now adjust to zero inflation.  There is excess supply of too many goods and demand is only expanding at a pedestrian rate. Prices will continue to come under pressure across swathes of industries as a result. Companies are hardwired into expecting price inflation in their planning and forecasts, and this will have to change. It is said that science progresses one funeral at a time and while businessmen don’t enjoy the tenured lifestyle of academics, this is an adjustment that is likely to take years.

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Financial Heroin

If I have a house fire and my wallet, containing £100 in cash, is destroyed, in theory, the Bank of England would be obliged to reissue the £100 in cash to me if I could present sufficient proof of the notes’ loss and their serial numbers. Is this in any way inflationary? I think it would be very difficult to argue that it is. 

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