DECEMBER 2015 / NO. 2
TAGS: QUANTITATIVE EASING, FED, ECB, FINANCIAL MARKETS, CENTRAL BANK, CHINA, US

Quantitative Easing by the FED and ECB

“How long will this last with zero interest rates politics, quantitative easing by the FED and ECB, and fast-growing debts around the world?”
A short story: “It is July 2015 on the shores of the Mediterranean. Times are tough, everyone is in debt and everyone lives on credit. Suddenly a rich tourist comes to town; he enters a hotel and puts a € 100 note on the reception counter to inspect some of the upstairs rooms for that evening. The hotel owner takes the € 100 note and runs to the butcher to pay his debt. The butcher takes the € 100 note and runs to the supplier of feed and fuel to pay his debt. The supplier takes the € 100 note and runs to the town’s prostitute to pay-off his credit. The hooker runs to the hotel and pays off her debt with the € 100 note for the rooms she rented. The hotel owner puts the € 100 note back on the counter so that the rich tourist will not suspect anything.
The tourist comes down after inspecting the rooms and takes the € 100 note, because he didn’t like the rooms, and leaves town.”
The bottom line: no one earned anything, but the whole town is now without debt and looks to the future with increased optimism.
Use your imagination: China might collapse like a house of cards and the US might face a new recession. Financial markets are driven by bubbles and the economy gives delusionary hope. Central banks lose control and we can expect more chaotic developments in the financial markets. Are those of us, active in strategic intelligence, pessimistic or realistic by bringing you face-to-face you with several macro-economic Grey Swans? Please give this some future perspective some thought.
“How is strategy developed in your organization? Is strategy a resource-allocation process or is it an insights and foresight generation process?”
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