Role of currency movements in global markets

Published in the Financial Times, 16 March 2014


Martin Wolf’s excellent article “The spectre of eurozone deflation” (March 12) leaves out one important aspect of the causes of inflation and deflation in today’s globalised markets, namely the role of currency movements. The euro has been appreciating against the dollar for some time now and making a large number of dollar-denominated imports like oil, other commodities and food stuff cheaper and with that lowering price indexes. That in itself is hardly worrying.

A parallel to this is the reducing inflation in the UK. When sterling devalued in the immediate aftermath of the 2007-08 recession, it did not do much for exports, as was hoped for, but led to soaring inflation, which is only now falling with sterling appreciating again around 10 per cent against a basket of currencies.

It is important to understand that the former drivers of inflation, namely demand increases through wage rises leading to wage/price spirals, no longer exist. Bank of England governor Mark Carney is no doubt aware of this – I hope.

Bob Bischof, Vice-President, German-British Chamber of Industry & Commerce, UK


Bank Should Have Learnt From Soccer – Letter to the FT

This letter was printed in the Financial Times on Monday July 7th. You can read it on here.


In Martin Wolf’s excellent guidance notes to Mark Carney (Comment, July 5) he writes: “The appointment . . . was a bold move. It is wrong to expect miracles . . .”  He does not appear to share the enthusiasm of the chancellor and others about what “the outstanding central banker of his generation” can achieve in the UK.

Maybe Mr Wolf felt reminded of the appointments of Sven-Göran Eriksson and fabulous Fabio Capello, who were supposed to revitalise the English national team and who were heralded by the Football Association in much the same fashion.

As a German, I find it equally incomprehensible to appoint a non-English person to either job. London prides itself, rightly so, as one of the most important world centres of financial expertise and the homeland of football – and can’t find suitable candidates?! Apart from everything else, where is the British pride?

Britain’s economic future will in any event not be decided by the financial wizardry of a central banker nor will the English football team’s performance be enhanced by coaches from abroad or home. Both have the same problem in common – the system under which they work is wrong.

Ordnungs- politik: the real third way

This letter appeared in the Financial Times Saturday 7 April 2012

Bob Bischof Letter in the FT April 2012

Sir, Michael Portillo hits the nail on the head with his suggestion of funding political parties out of tax revenues. Britain is the nation of common sense and everybody knows instinctively that “Who pays, says!” . Neither the union barons nor the rich donors should do either and it is pure logic that the voting, taxpaying public should do it. The Allies introduced this system in Germany after the last war and it works well – as do so many of the checks and balances, which govern modern Germany’s public life. There appears to be a growing murkiness in Britain in the relationship between business, unions, politicians, the media and police, which eats at the fabric of this free, open and liberal society. David Cameron would be well advised to forget about the “Big Society” with less regulation and rather re-establish a more “Orderly Society” with a dose of “Ordnungspolitik” to save it.
Yours sincerely
Bob Bischof