Connect with us

Features

Stock market unsustainable

Published

on

Wednesday and yesterday’s falls in stock markets around the world are worrying. The fall followed Ben Bernanke’s prediction that the Federal Reserve would ease its bond buying programme.

It seems stock markets can only grow if central banks intervene heavily or print money. This is unsustainable. The private sector must stand or fall on its own merits not through central bank largesse.

This market instability reflects the reality that the underlying weaknesses have not been resolved. Global imbalances and over leveraged banks remain. Rising government debt that is driving austerity programmes continue to choke off demand. This all makes pretty depressing reading.

If you believe in the efficiency of markets, and we guess those who work in stock markets do, the markets need to find their natural level. This will hurt. This will hurt ordinary investors but is a necessary correction.

In the meantime the government should be using its ability to borrow and tax to stimulate sustainable growth from new clean technologies, foremost amongst them renewable energy.

Advertisement

If we are to weather future economic storms from resource scarcity, commodity price volatility and out declining share of global GDP, this needs to be a central plank of government and opposition policy and strategy.

Further reading:

There is a disconnect between investment and the real world

We need investment to return to its ‘patient evolutionary path’

Twitter hoax wipes $200bn off Dow Jones (for five minutes)

Advertisement

Dow Jones and FTSE spikes ‘could be based on sentiment rather than substance’

Simon Leadbetter is the founder and publisher of Blue & Green Tomorrow. He has held senior roles at Northcliffe, The Daily Telegraph, Santander, Barclaycard, AXA, Prudential and Fidelity. In 2004, he founded a marketing agency that worked amongst others with The Guardian, Vodafone, E.On and Liverpool Victoria. He sold this agency in 2006 and as Chief Marketing Officer for two VC-backed start-ups launched the online platform Cleantech Intelligence (which underpinned the The Guardian’s Cleantech 100) and StrategyEye Cleantech. Most recently, he was Marketing Director of Emap, the UK’s largest B2B publisher, and the founder of Blue & Green Communications Limited.

Advertisement

Like our Facebook Page

Advertisement

Trending