Fascinating argument by Larry Elliott in the Guardian this morning:
Every bubble in recent years has had its signature deal that marks the point when the frenzy peaks; the purchase of Time Warner by AOL during the dotcom boom; the RBS takeover of ABN Amro just as the financial crisis of 2007 was breaking.
His suggestion is the Glencore listing may be the precursor to a commodities crash, at least in the short term, reflecting current over pricing.
I have no doubt the market is laden with unrealised gains that don't reflect economic reality right now. So I agree with Larry. Expect a crash.
All of which makes me wish we had a form of capitalism that could learn to use money constructively (like government) by investing in the things people really need.
I fear we're a long way from that yet. So instead capitalism limps from one speculative gain to another.
It's the Reagan/ Thatcher de-regulation legacy.
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Richard you ask: – Has anyone asked by how much the ordinary people of Jersey gain by having the world’s largest commodity trader use their law? And “Gregory” claims that a possible explanation for Glencore’s presence in Jersey is because Jersey company law is “more flexible”.
The Jersey government (infamous for having the attention span of a gnat and unaware of the basic precepts of long term planning) fails to grasp that “finance” neither knows nor understands the concept of “fidelity” – and that as soon as any company determines that the convenience of Jersey law no longer suits its purpose it will up-skittles and go — overnight.
Bringing further ruination to the “ordinary people of Jersey”.
But then we knows this already!
Timing is everything as they say.
QE2 in the US finishes soon? Will QE3 replace it? The inflationary consequences of QE2 may play out and lead to demand destruction and a reversal.World populations are growing though.
World politics?