Good as gold
Spandau Ballet’s 1983 anthem Gold could be the national anthem for the world’s inflationistas.
Always believe in your soul
You’ve got the power to know
You’re indestructible
Always believe in, because you are
Gold! GOLD Read more
Stephen Foley, the FT’s markets correspondent, says a number of forces have combined to sour the outlook for the precious metal, and none of them seem likely to abate any time soon.
A suggestion by Dutch finance minister Jeroen Dijsselbloem that the Cyprus deal could mean depositors at troubled banks elsewhere in the eurozone also suffering has pushed banks back into bear territory. James Mackintosh, investment editor, warns of the risk of a vicious downward spiral unless Europe and the European Central Bank can reflate peripheral economies. Read more
The S&P 500 is gnawing at an all-time high. Bond proxy stocks are driving the rally and James Mackintosh, investment editor, warns that as companies opt for share buy-backs rather than reinvesting, future profits and investors will be the poorer.
As safe as the Bank of England
Among phrases you don’t hear any much any more are:
It shouldn’t be a surprise that all three are out of fashion, after the US housing bubble that brought down the world economy, the collapse of sterling and the Bank of England’s failure to control inflation over either the past 50 years or the more recent past, when it was aiming for 2 per cent (the blue line on the chart).
Yesterday’s UK Budget avoided the extra inflationary pressure that would have come from fiddling with the target, which should give some support for the pound. But don’t get too positive: outgoing governor Sir Mervyn King voted for a second time for more monetary easing, and while he was outvoted again, Mark Carney is widely expected to be both more dovish and more convincing. I discuss this in today’s Short View column and video, and in greater detail below:
The European Central Bank – like the Bank of England – has decided against an immediate further loosening of monetary policy, but Mario Draghi, president, says some ECB policymakers favour cutting interest rates. Ralph Atkins, the FT’s capital markets editor, argues that with small businesses in the eurozone’s south facing a severe credit crunch and the stronger euro hitting eurozone exports, further action from the ECB may soon prove inevitable.
An investor appeared to make sensible decisions with her family’s savings – avoiding her home country of Greece, picking a safe haven and bonds rather than equities. But as FT Alphaville reporter Lisa Pollack explains, the Dutch bank that issued the bonds she chose was nationalised and all was lost – a consequence of new legislation on bank resolutions.
Uncertainty over the outcome of Italy’s election has strengthened sterling as its safe haven status appeals, in spite of Moody’s downgrade of the UK. James Mackintosh, investment editor, examines the prospects for more of a bounce in sterling.
There are two things that matter in investing: what the fundamentals, such as earnings and the economy, are doing, and where they are expected to go. Investment editor James Mackintosh says when sentiment is extreme, investors will react much more strongly to any sign of bad news.
The pound fell after it emerged that governor Sir Mervyn King voted for more quantitative easing a fortnight ago. James Mackintosh, investment editor, explains how investors are viewing the prospect of further easing and a weaker pound, after the FTSE 100 rose above 5,400 for the first time in five years.
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James Mackintosh is the Financial Times' Investment Editor, writing and presenting the daily Short View column and video. In 16 years at the FT his posts have included comment editor, motor industry editor and hedge funds correspondent, as well as spells in the Parliamentary lobby and Paris. He was the first reporter hired for FT.com, joining two weeks before it launched.
John Authers is the Financial Times' Senior Investment Columnist, writing the Saturday Long View and a regular Monday column. In a 22-year career at the FT, his previous posts have included global head of the Lex column, investment editor, US markets editor, Mexico City bureau chief and US banking correspondent. His latest book is The Fearful Rise of Markets. 
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