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How do you see the Financial Markets?*

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John Faraclas

John Faraclas

How do you see the Financial Markets?* By John Faraclas

One issue bothering humanity, affecting the economy, conversely shipping is that of the Financial markets.

The US, Japan, UK and to a less extent Europe, follow the same policy of unlimited monetary accommodation. Currency debasement has become a major economic weapon for many countries in their effort to “acquire” competitive advantage over their competitors.

As dooms scenarios, about the euro-break-up, Chinese hard landing, US fiscal problems, haven’t materialise, investors are a bit relaxed and willing/prepared to take some risks. On the other hand Politics play a very important factor in the “working” of the markets and this creates a lot of uncertainty and hence increases the volatility of many financial assets.

On Cyprus: Well, they are “entering” the “mechanism” after clarifying the issue of transparency of their financial sector – that was what everybody was expecting, but things turned sour… with incalculable repercussions.

The Italian results have all the potential to become a catalyst for unpredictable changes in the European project. The reply of the European policy makers to these results will determine the future of Europe. Imagine for a minute what will happen if you have a German “Grilo”.

The Remedy will include more money “printing”, more structural reforms in the European states, more fiscal consolidation, otherwise the whole project will end up in tears.

Obviously Europe’s political elites continue to betray the middle class and can assure you that the way the peoples savings are being handled – in Iceland, Ireland, Greece and now in Cyprus,  by the supposed to be democratic regimes and transparent institutions,  will spark revolt. Add Spain and Portugal and you will see what I mean.  Now one can see why the proper Greeks where sending ever since 2008, yes you read correct 2008, money abroad….  For the time being it looks that the big European Union States might escape, but I will be categorical: NO, they will be bullied soon too, just wait and see…

I guess the Euro is in tatters and bankers and politicians should be held fully responsible.  Where’s the European Union Ombudsman…? …or isn’t one???

Ending this warning, and referring to my first sentence, given the low BDI, overcapacity and the explosion to come at any time, like an earthquake coupled with a strong tsunami, the shipping industry should be braised for the inevitable!

 *this question was put forward to me at a recent charity event…

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