Thanks Tom

Really:

The key word for anyone with an investment horizon beyond the next tricky year or so is "scarcity" – too many people chasing too little stuff. Long after the financial excess is washed through the system, population growth and rising incomes mean the world\’s principal economic theme will be the battle between excess demand and finite or limited supply.

Pretty much the definition of economics isn\’t it? The allocation of scarce resources to satisfy unlimited desires?

3 thoughts on “Thanks Tom”

  1. Any comment on Ambrose Evans Pritchard’s article on the ‘plunge protection team’

    Tim adds: No. Read it but don’t think he’s said anything very new. The whole problem with the Euro is the single interest rate in a non-optimal currency area and we’ll just have to wait and see whether it survives or not.

  2. “The whole problem with the Euro is the single interest rate in a non-optimal currency area”

    Isn’t that the problem with any country? That interest rates to kill off inflation from one area can kill manufacturing in another? What we would call the North-South divide (a form of that horrible phrase “postcode lottery” that we tiresomely hear from lazy journalists all the time).

    “we’ll just have to wait and see whether it survives or not.”

    That’s the weakness: with a single Government there are no cracks in the system that can be exploited (differences between cabinet ministers on monetary policy are resolved brutally). With the Euro, Sarkozy can threaten, the Italians can whine, the Germans can get angry, and eventually fundamental disagreements are resolved only by the system falling apart.

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