Tristan's Real-Time Research Feed by Simon Martin,
Head of Investment Strategy & Research

There is a big difference between perceived and realised risk - this blog seeks to close the gap!

Bang on ... great article ...



And remember that the last proper global developed markets inflation outbreak was precipitated by the USD devaluation as the US left Bretton Woods in 1971 ... USD is 60% of world reserves - euro is 20% ... so these players matter most ... and given the euro is about as weak as it can be (when you account for the role Germany plays as an anchor) ... the reality is the main catalyst for loss of inflation control probably needs to come from the USD channel ...

US money supply is one way to look for a leading indicator for signs of loss of control but money demand (ie velocity) needs to be stable or rising for money supply to work as a leading indicator of inflation ... you can bring the horse to water but you can't make him drink ...

Money demand is weak because the corporate and personal sectors are already pretty much fully levered up and government borrowing isn't brilliant at lighting up money demand unless you spray cash around to people and they don't save it (or use it to pay off their large debts) ... obviously this can always change so a watchful eye is important but I think the other eye needs to look to the FX market ... if money demand remains weak and people use government cash to pay off credit - this will be the best place to find inflation risk signals for people that are jittery about a price shock effect ...

Oh and remember both bonds and stocks are allergic to this effect ... so if you think its an understate risk running a real assets allocation is probably your best hedge!

Anyone who wants to hear more from us on this can always look at this link (written in 2017) ...


History has lessons for us in this regard...


So the pendulum swings ... it's easy for a CFO to say how wonderful home working is and how meaningfully it contributes to profits ...

But ultimately high value add businesses need to train and develop people so that they can develop ideas and innovations that will allow their firms to grow ... locking them in a bedroom with a laptop will simply not suffice ... Yuval Noah Harari (in his book Sapiens) suggests that humankind's success is about its capacity for collective imagination ... the best companies - the best teams are those that share ideas and combine efforts most effectively.

Shared spaces - shared ideas - shared success ...