I am a self-confessed 'news junkie'. It is an addiction, just like any other, and with it comes a particular suite of dependency symptoms. One of those symptoms is a voracious appetite for information, in my case especially where politics, economics and business news is concerned, and, like all of us, a dependency on the experience, expertise and opinions of those we are exposed to through our media channels of choice - print, radio, television, online, extra sensory perception, whatever.
However, the innate cynic in me (actually the realism that unfiltered optimists refer to as cynicism) has always consumed the broadest possible information footprint, from all points on the political and economic compass, in order to try to construct a perspective that is protected from dependency on any one channel. Regrettably, confirmation bias is a defining characteristic of how information is prioritised in the 21st century.
In the past 24 months, as the motorcycle industry cycle started to weaken from the peak-Covid bonanza, as shortages and supply chain inflation started to infect our (and many other) markets, as the war with Russia in defence of democracy and freedom additionally started to shape our economic landscapes, as the resulting spike, when the energy process started to feed consumer price inflation, I started to develop an uneasy feeling.
'horrendous debt burden'
In the past 12 months specifically, the frequency speed with which the 'Talking Head' consensus was proven wrong over issues from inflation and interest rates to how best to respond to the war in Ukraine and issues such as energy security, to say nothing of the even broader and more long-term issues surrounding climate change, that uneasy feeling has crystalised into an evidence based fear that those we listen to are as far from being able to grasp and understand the issues and plot a rational forward strategy as the rest of us.
Then, the shoe dropped. The event that finally came as a 'Five Sigma' proof of concept came, for me, in September. Having been exposed to dozens of economists, investment analysts, media types and assorted other 'Talking Heads' telling us all how the European Central Bank (ECB) had reached the peak of its interest rate rise cycle and that it and the other Central Banks were winning the fight against inflation, and that the only conceivable direction of travel from here on would be to see interest rates stabilise and then start to decline, guess what happened?
Yes, that's right - into my phone came an advisory that, in fact, the ECB had decided to raise its interest rates, yet again. They did so with all three of its interest rate mechanisms - on main refinancing operations, on the marginal lending facility, and on the deposit facility - increasing them to 4.50%, 4.75% and 4.00% respectively. This equates to an effective base rate, in 'old speak', of 4.75%.
So much for the economists. So much for the 'Talking Heads'. So much for the credibility of the illustrious Christine Lagard's experience and her own prior remarks. As a former French Finance Minister, who was Managing Director of the IMF for a long time - and is now President of the ECB - she is a lady who has built up a first-class reputation for 'telling it how it is', understanding these things and, mostly, getting it right.
She has been viewed as a voice of reason, a reassuring voice of stability and continuity on the economic scene, someone whose views have always been worth paying attention to, someone who knows who to listen to, and who to be deaf to. By any standards, hers is an impressive résumé. She is an impressive operator who has proven to be genuinely very good at her jobs. But if even she and the team around her can get it wrong in the present economic climate, then the rest of us have no chance.
What's this got to do with us? Everything and nothing. Ultimately our livelihoods are simply dependent on the number of people who want to ride motorcycles and the number of miles they do. Simple.
On the other hand, the economies, and the economics that we are dependent on, are not that simple. If they really are being steered by people who have no better a handle on what to do (on both sides of the Atlantic, globally, everywhere) and how to respond to the issues that confront us, than the rest of us 'civilians', then the past 15 years of fiscal caution and 'New Beginning' for the Global Financial Order - following the Financial Crisis that metastasised with the 'Lehman Apocalypse' of September 2008 - have been for nothing.
Aside from a brief 20-year interregnum that came crashing to an end on September 12, 2008, when bankers were seen fleeing the scene of the crime, a period during which the world basked in the reflected glow of Cold War triumph without the nuclear winter, a brief era in which it appeared that Western democratic values had triumphed over autocracy, that liberal economics had found the Holy Grail of capitalism, that Free Trade had triumphed over protectionism and that a rules based world order had consigned nationalism to the margins of history, all those established and orthodox certainties and no uncertainties again. There is now a new war of ideas to be won.
Having finally consigned so-called "quantitative easing" to the trash can, the primary tool used to deal with the 2008 financial crisis and, subsequently, the pandemic, has left the major economies and central banks with a debt mountain of eye-watering proportions, mirrored, in large part, by the horrendous personal debt burden that consumers are carrying.
And yet, here we are. Working in an industry that, having prospered in response to a global pandemic, is not seeing (yet!) a collapse in the popularity, affordability, or relevance of its products.
With the exception of certain 'special case' economies (such as the UK), most of the major markets in Europe are seeing record-setting levels of demand for our market's products. If, as claimed, EICMA is seeing more returnee exhibitors, and really are now filling most of the eight halls they are using, then yay us!
