Market Chaos and the Fatal Silence of Politics

This is the (updated) translation of an article that appeared January 6, 2015 on this site. We intend to publish one article in English every week in the future to allow more readers to follow closely our analysis of global and European events.

The international markets have been in tumult since the beginning of the year. Many commentators lose their bearings and are at a loss to explain what is going on. Indeed, some developments are nothing short of extraordinary. Prices for globally traded commodities are plummeting at a staggering pace. Particularly prices for oil and oil products are in sharp decline. Other commodity prices like the one for copper are also under pressure. Dramatic ups and downs occur in the stock markets, while prices for fixed income securities record historic heights and their yields historic lows.

Instead of having to pay interest on its loans the German government can borrow money for a few years and to receive a premium from investors. Central banks print money as never before – apparently without restraint – with the consequence that price levels are falling almost everywhere. The exchange rates of some major currencies are in a steep decline. [...]

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