A TROUBLING REASSESSMENT

At the start of the year I was pretty convinced that we were into a new paradigm in regard to controlling interests affecting global economies.  I'm less convinced today.  It is true that we are witnessing what appears to be, for the first time in a long time, a lock-step move--upwards by the way--in global economic development but not because of fiscal or agreed economic reassessment.  The controlling modifier in all regions is Central Bank activity, or lack of the same, with the slight and rather hesitant exception of the Fed earlier this year.  But the ECB or the B of J?  Or for that matter the Bank of England?  I think not ol' so, we rather like it where we are.

Consequently, the only game in town is Jackson Hole and tomorrow is the day that has dominated talk all week: what will Janet say?  Who knows. This situation is so fluid and so dominated and influenced by politics I suspect that Janet is probably not exactly sure what it is she should say.  Then again, does she want another term as Chair, and if she does what does she say to convince The Donald that she deserves one?  As to that, like everyone else, I'm sure she has no clue. But the world watches and waits as shall we.

Whatever happens I am afraid it is looking more and more as though the next couple of years, at least through the next U.S. Election cycle, that is is the Central Bankers who hold the Trump. Cards...every pun intended.  This, IMHO, is not a good thing despite what has been so far this year a rather successful turnaround, especially in Europe.  Does anyone really believe that the elected heads of the governments of France and Germany wield more influence over the European economy than does Mario Draghi?  And in the U.K...well, perhaps it would be an easier question if one could determine just who it is the political leader of the U.K.  To say that Ms. May has been a bit of a disappointment....well we are British you know a prone to understatement.  Americans just might call her dim.

So we await The Janet.  At 2.19% it is too low you know.  There's a lot going on out there and somebody, hopefully it's Ms Yellen, had best start shooting in front of the duck despite the seemingly begine inflation data.  Perhaps we'll have a better handle on where we go from here this time tomorrow...or not.  Anyway it's still a wonderful summer in the Fly Over Zone.