Anyone buying a real Christmas tree in America this year has suffered a nasty dose of sticker shock. Depending on where and what you buy, you'll pay up to 20% more this year than last year. Why? It all goes back to the great financial crisis of 2007.
In the confusing and confidence-sapping years immediately after the crash, tree farmers planted fewer trees than usual. A seven- or eight-foot tree (remember the Americans have rather bigger houses than we do) takes ten years to grow. So the effects of the crisis are only now showing up in the supply, and hence price, of trees.
But the crisis which now seems so long ago isn't just affecting the cost of trees. Flick through the magazine (this week and every week) and you will see its consequences on all too many pages. For example, we look at how zero-interest-rate policy (Zirp) has helped create the zombie companies that are holding back growth and productivity everywhere from the US to Spain.
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It is also the driver behind the overly-high asset prices we worry about so much, the inequality conversation in the UK and beyond, and the rise of new no-yield "asset classes" such as bitcoin (for a discussion on whether the cryptocurrency is an asset class or not, don't miss next week's cover story).
If housing weren't out of reach, wages weren't stagnant, and you could get a proper return on cash savings, would we be getting press releases at MoneyWeek telling us that "within 12 months cryptocurrency will be held by one in three millennials"? We suspect not.
When will it all end? Perhaps in 2018. The global economy appears to be starting a synchronised boom. If it takes off, inflation will rise (CPI, the official target rate, is still above 3% in the UK), wages will rise and interest rates will rise. That will shake out the zombies, shake out the markets, set us on path that doesn't constantly reflect the events of a decade ago, and, with luck, mean cheap Christmas trees for all in 2027.
Finally, I just wanted to let you know that as a result of MoneyWeek changing ownership earlier this year (we are now pleased to be owned by The Week Ltd, a subsidiary of Dennis Publishing) we have made a few changes to our privacy policy. Please take a look so you are aware of the changes and of our commitment to provide you with a secure place to learn how to make the most of your money.
Our customer-services details have also changed. You can now call us on 0330-333 9688, email subscriptions@moneyweek.co.uk or write to us at Moneyweek Subscriptions, Rockwood House, Perrymount Road, Haywards Heath, West Sussex, RH16 3DH. What has not changed with our move is our commitment to provide you with excellent editorial every week. I look forward to continuing to do so!
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Beat the cost of living crisis – go on holidayEditor's letter As inflation rages, energy bills soar and the pound tanks, what’s a good way to save money this winter? Go on holiday, says Merryn Somerset Webb.
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How capitalism has been undermined by poor governanceEditor's letter Capitalism’s “ruthless efficiency” has been undermined by poor governance, a lack of competition and central banks’ over-enthusiastic money printing, says Andrew Van Sickle.
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Don't be scared by economic forecastingEditor's letter The Bank of England warned last week the UK will tip into recession this year. But predictions about stockmarkets, earnings or macroeconomic trends can be safely ignored, says Andrew Van Sickle.
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The biggest change in the last 17 years – the death of the “Greenspan put”Editor's letter Since I joined MoneyWeek 17 years ago, says John Stepek, we’ve seen a global financial crisis, a eurozone sovereign debt crisis , several Chinese growth scares, a global pandemic, and a land war in Europe. But the biggest change is the death of the “Greenspan put”.
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The wolf returns to the eurozone’s doorEditor's letter The eurozone’s intrinsic flaws have been exposed again as investors’ fears about Italy’s ability to pay its debt sends bond yields soaring.
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Things won't just return to normal – that's not how inflation worksEditor's letter You might think that, if inflation is indeed “transitory”, we just need to wait and everything will return to “normal”. But this is a grave misunderstanding of how inflation works, says John Stepek.
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Car hire and the strangeness of the post-pandemic economyEditor's letter A global shortage of hire cars and unusually high hotel occupancy rates sum up the post-pandemic global economy in a nutshell, says Merryn Somerset Webb, with enhanced demand meeting restricted supply.
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Why we need to get a grip on our governmentEditor's letter Our government is trying to do too much, enacting policies that are destructive to the private sector. It needs to drop the the feel-good nonsense and create policies that lead to long-term wealth, says Merryn Somerset Webb.
