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16 december 2015, what goes down, must come up

So, finally, after almost a decade, us interest rates have risen, ending a period unprecedented in the history of monetary policy since such a thing began with the creation of the bank of england in 1694. Though rates remain on the floor in london and frankfurt, the inevitable upward march (yes, even eventually in euroland) has begun. So what ? Inflation, on both sides of the atlantic, remains extremely low (the "usual" trigger for rate rises) and the jobs market, even in the us, is far from robust, much less so in europe and in both cases (as shown by stagnant wages) flattered by the growth of low-grade and flexible positions. There is a strong argument that this extraordinary period of zero rates and money-printing (see 21 october 2010, "dread the launching of the bad ship qe2") was a necessary evil, but these last years were not a new paradigm but a period that despite its comfort blanket effect has negative consequences which ultimately need unwinding. The lack of any "taper tantrum" shows global markets agree; indeed the rise was anticipated and welcome. There were always limits to how long dropping bucketfuls of money from the sky could be sustained, although the rise will not be without consequence, not least of a dollar bubble, of higher costs for those borrowing globally in dollars and especially for the battered emerging markets, china most of all. Nonetheless, to quote the very uneconomic henry kissinger, whatever must happen ultimately should happen immediately. Off we go...