The limits of government intervention were on full display in September as yet another seventies moment came to life with an energy crisis. However, unlike the original OPEC dominated crisis, this one is completely self-inflicted, with misguided policies executed in the name of “consumer protection” and “net zero” demonstrating the folly of government by shibboleth.
As some readers will recall, the ‘70s would have fit Mr Weber’s categorization, albeit with great music and films. The combination of geopolitical and political turmoil and runaway inflation certainly left their marks on economies and financial markets alike.
On July 19 the month came alive with the long-expected lifting of remaining COVID restrictions in the UK, so called Freedom Day. Unsurprisingly the “lifting of all restrictions” actually saw the introduction of a number of new restrictions, thereby dampening the expected bounce of a reopening.
Attention was once again firmly centred on the Federal Reserve in June, with the mid-month meeting upending markets while giving the commentariat a bad case of the vapours. The cause? News that the Fed’s “dot plot” forecast showed rate hikes by late 2022 and that policy makers have acknowledged that they might soon discuss when to begin tapering bond purchases.
The animal spirits were rampant in the crypto markets in May, with traders heeding the call of the bombastic Tesla founder to make digital currencies the tail wagging the proverbial Doge. Volatility surged to 160% on USD/BTC at one point, buffeted by Musk’s conflicting comments and increasing regulatory scrutiny.
Both inflation and taxation came to the fore in April as data continued to confirm that recent efforts at monetary stimulus have manifest themselves in higher inflation prints.
As we pass the one-year anniversary of lockdowns across large parts of the world we remember Pericles, the fifth century BC Athenian hero who had considerable experience with both pandemics and lockdowns.
February saw divergent moves in markets as equities shook off higher interest rates to finish strongly, in what will surely be a recurring theme for the balance of the year.
January got off to an auspicious start as most of Europe was pushed back into lockdown very early in the month, dampening sentiment which had been given a boost by vaccine test successes and rollout.
