Philippe Herlin  Finance Researcher / Doctor in Economics

   

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Inflation Risk: Awareness is Growing
Published by Philippe Herlin | Sep 16, 2020 | Articles 4296

The ECB is substituting for the market. It's simpler that way, no need to convince investors, you print money and it's done. In this scenario, we are de facto witnessing the merger of the Treasury and the Central Bank: the financing of the government's deficit is directly connected to the printing press, money creation is in free flow.

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What If the Debt Doesn't Matter? Is This Realistic?
Published by Philippe Herlin | Aug 24, 2020 | Articles 30181

I mean, what if the debt wasn't serious? What if the explosion of its amount all over the world since the coronavirus crisis had no harmful consequences? What if we could even get rid of some of it without incurring any damage? This is the little tune we hear from those who want more and more public spending, who believe that only public spending can get us out of the rut, that we have to keep printing money.

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ECB Offers €1.3tn at -1% to Rescue European Banks
Published by Philippe Herlin | Jun 24, 2020 | Articles 21628

By rolling over the debt of ailing banks (new loans to pay off old ones), the ECB is giving them a very bad habit, namely that of governments with perpetual deficits, which are thus exempting themselves from any budgetary effort. What is the point of cleaning up one's balance sheet if the ECB graciously provides the necessary liquidity? The intrinsic situation of the large European banks is therefore not going to improve, at the greatest risk to savers...

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From Coronavirus to Inflationavirus?
Published by Philippe Herlin | Apr 16, 2020 | Articles 25728

With a sharp drop in GDP and an unprecedentedly high level of bank notes, we are entering the scenario we analyzed on February 6: money printing + fall in output = hyperinflation. Both mechanisms are, in our view, necessary for price slippage to occur, and here we are. Inflationavirus is coming.

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How Central Banks Will Expand the Zombification of the Economy?
Published by Philippe Herlin | Apr 2, 2020 | Articles 21479

Faced with the coronavirus crisis, the central banks went into "open bar" mode: in the United States, the Federal Reserve announced on March 3 an injection of $1.5 trillion coupled with a cut in its key rate to zero, while the European Central Bank followed with the announcement on March 19 of a €750 billion emergency plan. And it is clear that they can go beyond that, from now on it is "no limit".

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Zero Rate Ravages: HSBC France's Value Goes From 11 Billion Euros to Zero
Published by Philippe Herlin | Feb 20, 2020 | Articles 25279

Here is a further illustration of the damage that zero rates cause to retail banking, in France and around the world. In 2000, when the Sino-British banking mastodon HSBC wanted to buy Crédit Commercial de France (CCF), it was in competition with the Dutch ING and had to put 11 billion euros on the table. Twenty years later, while it is trying to get rid of it, the sale price is "close to zero" according to Les Echos.

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Return of Inflation: A New Scenario (Coronavirus and Other Black Swans)
Published by Philippe Herlin | Feb 6, 2020 | Articles 29089

"Where could inflation come from?", we asked ourselves in our previous article on rising energy costs. Let's explore another possible cause, reactivated by current events. When we look around us and throughout history, it doesn't seem that monetary sentiment alone is enough to cause prices to go up, it also requires a drop in output. This is the thesis we will develop.

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ECB: The Ongoing Headlong Rush
Published by Philippe Herlin | Sep 16, 2019 | Articles 25660

Mario Draghi decided before handing off to Christine Lagarde on November 1: the QE will be relaunched! Quantitative easing, the sovereign debt buyback of eurozone countries, will restart at €20 billion per month, "for as long as necessary", he announced on September 12th at a press conference.

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