“Japan was the dress rehearsal; the rest of the world will be the main event.”
- Investor in Japanese stocks, known to this correspondent, circa 2001.
“Twitter has taught me a couple of things. 1: there are some incredibly brilliant people in the world. 2: they are vastly outnumbered.”
- Tweet by @jrsalzman.
There are weeks when decades happen, and this past week feels like one of them. While US inflation expectations touched a four-year high and 10-year US Treasury yields reached seven-year highs, the voters of Italy – or rather its anti-establishment Five Star Movement and its far-right League – delivered a resounding raspberry to the EU and any lingering hopes for faster and smoother European integration. Two years ago, in this commentary, we were conveying our relief that the UK had finally elected to sever its political ties with a failing totalitarian socialist economic bloc. Now, displaying – if possible – even more political incoherence, the Italians are having a go. You can see below, courtesy of the Daily Telegraph, why they might have a point:
What follows is what we wrote in the giddy days of June 2016:
The euro zone is a latter-day gold standard. Because its member countries have no control over their own monetary policy, they must accept a one-size-fits-all model. But what is appropriate today for an economy like Germany’s is unlikely to be appropriate for an economy like that of Greece. (Which should never have been allowed to join in the first place – but then institutionalised corruption is another of the euro zone’s fatal flaws. Are the EU’s accounts and payments “free from material error” ? On this basis they haven’t been signed off by the EU’s own Court of Auditors for over 20 years.)
…click on the above link to read the rest of the article…