Compass Wealth matters

 For those who remember the 1970s, the thought of inflation may well fill them with fear. Younger investors may have no conception of why that might be.  A common definition of inflation is “too much money chasing too few goods”. If lots of people want to buy a house, then it may be sold by auction (rather than with a fixed priced) allowing for the price to “inflate” significantly above what may be expected previously.  The financial crash of 2009 led to fear that the world’s financial plumbing would seize up completely, resulting in such a collapse in demand that  deflation  would follow. Deflation is the opposite, where prices  fall  from one year to the next. While this might sound appealing it actually is not and is a far harder problem to solve. An example of this is the economy of Japan which has been battling deflation for thirty years. Where as price inflation leads to buyers trying to buy now to avoid paying more later, price deflation leads t...

  This piece is much longer than our normal blogs.  We hope that you find it of interest of course, however the somewhat technical language and length is makes this quite different to our normal publications. To many investors, the Euro is simply the currency of Europe. Just as the US Dollar is the currency of America. There is no fundamental difference. However, this is not the case. The Euro is very much an unfinished project that is held together more by political will than economic norms. Its very structure and system of operating has not only impeded the performance of most member economies, it has already threatened to plunge the European economy as a whole into destructive chaos. With inflation now rising around the world, it  could  be about to do so again.   The history of the Euro The Euro was launched on the 1 st  of January 1999. With the introduction of coins and bank notes on the 1 st  of January 2002, a host of currencies ceased to exist...