Unbridled finances are inflation everywhere, even on Twitter
1 week ago
– Inflation is everywhere, even on Twitter
Central banks will have to act delicately to calm rising prices. Meanwhile, Elon Musk continues his excesses.
Thomas Veylet – CIO Merion Swiss Partners
These last few weeks in the stock market have been difficult. The investor has no choice but to deal with this avalanche of data, which forces us to take a position every 5 minutes and change our mind within 5 minutes. We are now capable of anything and everything that is the opposite in less time than it takes to say “inflation.”
Since the advent of Covid, central banks have been forced to withdraw strategies stored in letterboxes. A sign reading “Open only in emergencies”. There were zero rates and cheap money. Governments then showered the population with all kinds of help and economic support. This is what allowed the world stock markets not to collapse and even set new records in a few months.
Everything has a price
But everything is paid for in one day. At the moment, we pay in cash in the form of inflation, which we describe as “galloping”. Recent figures confirm that it is no longer controlled in the United States. And even if Europeans are smart because they are less strong at home, we are well aware that the problem will be exactly the same in the near future. If we all know about the rise in price of gasoline at the gas station, we do not pay much attention to sugar, coffee, flour and bread. Inflation is everywhere, and rising rates are the only known weapon to fight it.
There is no vaccine, no miracle pills, central banks must raise rates quickly. But not too much. Not too fast and not too hard, because otherwise we risk slowing down this economy, which is trying to recover after the Covid episode. To sum up, and simply put: if the Fed and the ECB do not raise rates fast enough, we will fall into a zone of hyperinflation, and it will be the fault of central banks; but if the Fed and the ECB raise rates too quickly and too much, the economy will rot and it will be the fault of the central banks. It remains only to use the tool with the utmost care and thrift, not allowing it to spill over the wings.
Deal with this and… Musk
Central banks have the share of stock markets in their hands. Investors are forced to deal with this state of affairs, hoping that Mr. Powell and Mrs. Lagarde will not make mistakes in trying to stabilize the state of the patient economy entrusted to them. But while the vast majority of the financial media is hungry for inflation and speculates on a sharp rise in rates over the next few months, there is again one guy who is talked about every five minutes and who is clearly above controversy, Elon Musk.
Yes, yes, talking about yourself when you are the richest person in the world and you have made a specialty to name your children as mathematical formulas is quite easy. But when you also start shopping with your savings, it inevitably leaves traces in the markets, or rather on Twitter.
Equal to others
So the head of Tesla decided to buy a 10% stake in Twitter, and then get the rest in the coming days. But that’s not the problem. This is mainly due to the fact that Musk does not announce his share in Twitter within the statutory timeframe, and also continues to talk too much about Twitter.
The billionaire again puts himself in a “borderline” position both by his methods and by the fact that he is more equal than others and does not respect anything. But whatever it is, as long as he can afford lawyers, he will be fine. And when you weigh 300 billion, you can afford almost every lawyer in the world.