David McWilliams: Swing in interest rates will torpedo 'Trackerville'
GOOD morning and Happy New Year. I hope your Christmas went well and the virtuous resolutions are still intact after day one. This week, let's have a look at the international factors that will dominate the global economy in 2013 before looking at the main issues likely to influence Ireland. This isn't a forecast, rather an assessment of the forces that will emerge as pivotal in the path of the economy.
For the first time in a long time we kick off with Japan. For so long the sick man of the global economy, having suffered the missing decade or two following its property crash, Japan will have a disproportionate impact on the world economy via the financial markets this year. The news reflects the impact of political change in Japan and the fact the economy is still in the doldrums.
Unnoticed in this part of the world over the Christmas period are the moves by the new Prime Minister Shinzo Abe, who said this week that he wanted to push up the target rate of inflation in Japan. He wants to generate inflation over and above the rate that the central bank is happy with. Why might he do this? Surely that sounds wrong?