The Euro, The Dollar, Bubbles And The Simple Fact of The Oversupply of Money
- By Professor Prabhu Guptara
- Published 04/28/2008
Professor Prabhu Guptara
Professor Prabhu Guptara is Executive Director, Organisational Development, Wolfsberg (a subsidiary of UBS - one of the largest banks in the world). He is also Freeman of the City of London and of the Worshipful Company of Information Technologists, and Chartered Fellow of the of the Chartered Institute of Personnel and Development; he is also Fellow: of the Institute of Directors, of the Royal Commonwealth Society, and of the Royal Society for the Encouragement of the Arts Commerce and Manufactures; and he continues to supervise PhD research at the University of Fribourg (Switzerland) as well as to be Visiting Professor at various Universities and Business Schools around the world.
Earlier roles include: a Governor of the Polytechnic of Central London, Member of the Council of the British Institute of Management, of the International Federation of Training & Development Organisations (IFTDO), of the Association for Management Education and Development (UK), of the South East Regional Council of the Confederation of British Industry.
Judge, 1988 National Training Awards, 1980 Commonwealth Poetry Prize, 1990 & 1991 Deo Gloria Prize for Fiction; Chair of the Panel of Judges, Deo Gloria Prize 1992 & 1993.
Experience with an enormous range of organisations including: Akzo Nobel (Netherlands), the Associated Banks Institute (Germany), Barclays Bank (UK), British Petroleum (UK), the Council of Europe, Cultor (Finland), Deutsche Bank (Germany), Groupe Bull (France), Federation of Finnish Engineers (Finland), the International Management Association of Japan, Kemira (Finland), Kraft Jakob Suchard (Switzerland), Leadership Academy (Finland), Nokia Telecommunications (Finland), Novo Nordisk (Denmark), Sedgwick International Insurance and Reinsurance Brokers (UK), Singapore Institute of Management, Sonatrach (Algeria), Sun Alliance (UK), UNCTAD, Valeo (France), and so on.
Organiser, chair and lecturer by invitation for numerous international conferences, he has contributed widely to radio and television in the UK and other countries (The Money Program, Any Questions) and has written for Financial Times (London, UK), The Guardian, The Times and other publications; articles, for example, in The Gower Handbook of Management, The Gower Handbook of Quality, and the International Encyclopedia of Business & Management (Routledge).
A CD-ROM has been issued of his lecture at the Professorenforum, University of Zurich, titled "Making the World Better - Why it does NOT happen...and what TO DO about it"
Further information available from rbadertscher@coba.ch
His best-known research publication is "Top Executives in the Global 100 Companies and their IT-Competence" (ADVANCE: Management Training Ltd., UK, and Wolfsberg Executive Development Centre, Switzerland, 1998); and he is included in Debrett's People of Today and in Who's Who in the World. Professor Prabhu Guptara lives in Switzerland.
The Euro is an inherently unstable currency which has been stress-tested only once or twice. My judgment is that the Euro will inevitably and very suddenly come under pressure soon, due to the diverging fortunes of the fairly solid northern part of the Continent and the rather more frothy east and south (as well as Ireland).
On the other hand, the dollar must be at or near the bottom (watch for the US authorities to intervene as soon as equity and/ or bond prices start being affected by the slide of the dollar - which can't be very far away).
BTW the pressure on the Euro will also lead to pressure on all emerging market economies, even those that have somehow weathered the crisis so far. So it is probably time to underweight those currencies as well.
How can emerging market economies come under pressure, you may wonder, when their natural resource commodities are riding so high?
My view is that we now have a bubble in oil, gas, and most natural resource commodities - and this bubble won't last long either.
The problem is: where will the next bubble be created? Around the globe, we have printed excess money since at least immediately after 9/11 (not to mention the fashion for increasing astronomies of leverage!), and all this money must be placed SOMEwhere: wherever the money goes, we have and will have a bubble, because the money is now travelling purely to speculative destinations without regard to fundamentals.
Indeed the excess supply of money has itself become the most fundamental factor creating bubbles and destablisation worldwide.
The proposals from the FSF and the Basel Committee are merely tinkering around the edges of the real problems facing the global economy today: because these institutions refuse to face the simple fact of the oversupply of money.
