Ian Hamilton

This column is authored by Ian Hamilton, who is the founder of IDS Group. IDS provides fund administration services in Africa and Europe through Malta. He is also the founder of Scotstone Investments, a company that has fund structures and services for global emerging new managers.

Banks are there to make you a small fortune by reducing your large fortune and pocketing the difference

It puzzles me that there is such hysteria in Europe regarding inflation falling to zero and possibly below. I have asked why and have been given the answer that inflation is required to ensure that people spend, and that by spending growth is maintained. This is to me old style economics and most probably the reason why many economies are in such a mess. Why do I say this?

We kick the bucket down the road.

Economic growth has been fostered by credit creation and that has resulted in a huge balloon of private individual debt that effectively has mortgaged the future, much the same as governmental debt. A simple description, we kick the bucket down the road.

Our cultures now demand instant gratification, no longer is there a culture or willingness to save for what one desires, you simply obtain credit to buy what you want now. Couple this with inflationary expectations and consumers have an excuse why they must buy now. Add low borrowing interest rates and the past willingness of banks to lend and you have a toxic mix.

This is the hangover the world has to deal with. Keeping inflation low takes out one factor.

The factors behind low if not negative inflation need to be considered. Lower oi......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.