#Weekly #Review - Financial Markets & Economics: Commentaries by Fabian Wintersberger

We all move inside bubbles. Most of our opinions are in line with those of the people we interact with daily. Social media shows us the articles we agree on, and on Twitter, we follow people who share a similar view of the world. It is true, everyone prefers to read things that support his opinion on the world than otherwise. Nobody likes to question his own standpoint. Nevertheless, questioning his own point of view is something we should do regularly. Only if we do that, we can test our outlook on things and learn. Either we have better arguments to propose our standpoint or change our view if the counterargument is clearly better. It is no shame to be wrong; it is terrible to stay wrong consistently.  For today's commentary, I would like to discuss the argument, why I and the majority of my opinion-bubble is wrong, and inflation will indeed be transitory. At the beginning of the summer, I've already discussed Jeff Snider's and David Rosenberg's arguments, who continu

In what a crazy environment we are living! There’s no day where you don’t wonder about crazy price movements in the markets.   Still, many people argue that those price movements are solely a result of supply-chain bottlenecks, a Russian president withholding gas from Europe and China, or other factors. Maybe they’re right, and partly they indeed are. But there is another story to tell here… That is why I love the model of supply and demand. Although there are many criticisms to it, like it makes unrealistic assumptions that don’t withstand reality, it puts down so nicely why the current inflationary pressures were inevitable given the response by central banks and governments. Below I want to discuss what I mean. In 2020, governments told their people to stay at home and stop working from one day to another. As people did not go to work, production in the affected sectors fell, and usually, no work means less income and thus lower demand. Therefore, the price level would have remained

The Empire of Ancient Rome is always an excellent way to start whenever you want to find out something about similarities between Empires. This is true for the rise of Spain, followed by the height of the British Empire, the current world leader, the US, and especially the European Union.  In my opinion, one can find some interesting parallels between those two and, given that they happen at the same ground, just at another time, it makes it even more interesting to look at it. Ancient Rome was reigning over Europe; it was the political center of the world. The European Union is a merger of several national states; Brussels is the political center ( although most policies are made in Berlin, Paris, or Rome ).  However, there is a difference: While the destiny of Ancient Rome is already in the books, the destiny of the EU is still open. As Mark Twain once said: History doesn't repeat itself, but it rhymes . That is the way we should compare those two eras.  Of course, I know that pl

Everyone who has watched the TV series 'Game of Thrones' is fascinated by all protagonists' continuous change in alliances. Long-term fellows are betrayed from one moment to another just because the protagonists hope for a better position to gain influence and, therefore, power. The show is engaging because George R.R. Martin is also looking at those who pull the strings behind Westeros' mighty kings and queens. Finally, these people decide who will reign over the Seven Kingdoms of Westeros.  My favorite protagonist was Varys. His wide net of spies informed him about everything that was going on in the Seven Kingdoms. Therefore, by manipulating communication, he guided the people on the top that he considered the best direction. Although he claimed that all his actions are done because of the greater good , everyone understands (at least at some point) that, in the end, he is only interested in his own destiny.  Maybe the game of politics in our western world is compara