Multiple can-kicking: the metal fights back
As Blockbuster strode robotically into insolvency earlier this week, the German economic march became stuck in the mud resulting from ClubMed and global downpours. Blockbuster Video was a retail outlet squashed between the rise and rise of internet shopping, and technological changes in streamed entertainment. Germany is in turn being squeezed between Euuropean hubris, American debt, and Asian overheating: the country’s key forecaster slashed its outlook by a whopping 60%.
Britain’s retail dinosaurs in particular are falling like flies (as I predicted they would) but now we can see the first signs of social cover breaking down in the face of economic obduracy: over 100,000 disabled people are having their home care reduced or removed, and the Leonard Cheshire organisation describes the system as “on the verge of breakdown”.
The yen languished after a forceful selloff in anticipation of the Bank of Japan taking radical action to tackle deflation. Under pressure from newish Prime Minister Shinzo Abe, the BoJ looks set to buy assets nonstop until 2% inflation is reached.
Japan has been flouncing about trying to escape from its hybrid problems for nearly a decade. This move is yet another turnaround for a central bank that appears cluelessly frozen in the headlights, but is being egged on by political desperation.
The Japanese represent yet another case of multiple problems colliding in a staggeringly pernicious manner: age demography, nuclear accidents, world trade crises, fiscal confusion, and the rise of China. The wages of sleepy can-kicking are death by a dozen boomerangs. Winner, 2013 mixed metaphor perhaps – so here’s something clearer from Mark J. Grant, of Out of the Box fame.
‘….it is the inescapable conclusion that we have backed ourselves into a corner of our own making and that to escape this dark and dangerous place will be a painful experience….When the economies of Spain, Greece, Italy, Ireland, Portugal and France are in decline and yet their sovereign yields fall as supported by a conditional promise from the ECB, then trouble is in the making.When America spends money like it is without end because the Fed hands out the byproducts of the forest as if it was an unlimited supply, then the valuation of paper overtakes the use to which it is put. We are sitting with our little round plastic toys and blowing bubbles into the sky and when the turn comes, when the bubble is pricked, scant few will be able to run fast enough or get through the door quickly enough when the madding crowd is rushing in a collective push to get out of the burning theatre.’
I endorse every word, and repeat one of The Slog’s more consistent mantras: there is no such thing as a gradual panic. Those ahead of the panic are openly opting for the last place left offering financial long-term and physical short-term safety: top-end property.
Others still obsessed by the attraction of manipulation to gain their end-game money are also, however, at work. Some of the signs on this dirt-road are clearer than they were. I’ll be posting about this later today.
Last night at The Slog: Self-demonising Islamism