Columns

It’s time to rediscover the importance of interest

30 Jun 2022

The cost of money is not only key to controlling prices. It also affects the value of financial assets, the allocation of capital, and the appetite for debt. Ultralow interest rates distorted these decisions, Edward Chancellor says. Little wonder financial anxiety is rising.

Investors need to learn to ride inflation cycle

23 Jun 2022

Bonds and shares are tumbling as prices soar, just as in the 1970s. The experience of that decade suggests value stocks, commodities and safe-haven currencies offer the best protection, says Edward Chancellor. But wild swings in inflation can still catch markets off-guard.

Central bankers forget the lessons of the 1970s

16 Jun 2022

Inflation is complex, yet all sustained increases in prices have been accompanied by an expanding money supply. The Federal Reserve and other central banks ignored this the last time inflation took off, writes Edward Chancellor. There’s no sign they are learning any faster today.

Inflation-shy investors try on “least dirty shirt”

9 Jun 2022

Interest rates in the developed world lag far behind rising prices. That’s sent savers flocking to traditional safe havens to preserve their capital. Edward Chancellor argues that emerging-market currencies may offer a more appealing alternative to financial repression at home.

Global cracks complicate West’s energy transition

2 Jun 2022

Modern civilisation is built on fossil fuels. If past shifts are a guide, switching to renewable energy will take decades, says Edward Chancellor. Conflict with Russia and tensions with China make this harder. The West faces a choice between decarbonisation or deglobalisation.

How sanctions against Russia could backfire

26 May 2022

The threat of financial punishment did not prevent President Vladimir Putin from invading Ukraine. History shows that economic penalties can stoke conflict by pushing countries to be more self-sufficient, Edward Chancellor writes. Investors risk being stuck with stranded assets.

Inflation revives spectre of the long bear market

19 May 2022

The S&P 500 Index has fallen almost 20% from its early January peak. Such downturns have become shorter and less frequent due to support from the Federal Reserve, says Edward Chancellor. But rising prices have removed the safety net. The next selloff could inflict more damage.

Emerging markets offer dubious investment appeal

12 May 2022

Stocks from developing economies have fallen as fast as U.S. equities. While they offer diversification benefits, China’s inclusion will weigh on future returns, Edward Chancellor argues. At the very least, investors should remove the People’s Republic from their portfolios.

The elusive value of past investment mistakes

5 May 2022

A new library in Edinburgh hopes to improve financial understanding by studying historical errors. The best investors understand the importance of learning from their painful howlers. Yet, says Edward Chancellor, ultra-low interest rates have induced a kind of collective amnesia.

How the UK can cut power bills and go green

3 May 2022

The government is so scared of the cost-of-living crisis that it doesn’t want consumers to pay for low-carbon wins like heat pumps, even though this cuts energy bills in the long run. Instead utilities could do the job and spread the cost over 20 years, argues Hugo Dixon.