Anyone buying a real Christmas tree in America this year has suffered a nasty dose of sticker shock. Depending on where and what you buy, you’ll pay up to 20% more this year than last year. Why? It all goes back to the great financial crisis of 2007.
In the confusing and confidence-sapping years immediately after the crash, tree farmers planted fewer trees than usual. A seven- or eight-foot tree (remember the Americans have rather bigger houses than we do) takes ten years to grow. So the effects of the crisis are only now showing up in the supply, and hence price, of trees.
But the crisis – which now seems so long ago – isn’t just affecting the cost of trees. Flick through the magazine (this week and every week) and you will see its consequences on all too many pages. For example, we look at how zero-interest-rate policy (Zirp) has helped create the zombie companies that are holding back growth and productivity everywhere from the US to Spain.
It is also the driver behind the overly-high asset prices we worry about so much, the inequality conversation in the UK and beyond, and the rise of new no-yield “asset classes” such as bitcoin (for a discussion on whether the cryptocurrency is an asset class or not, don’t miss next week’s cover story).
If housing weren’t out of reach, wages weren’t stagnant, and you could get a proper return on cash savings, would we be getting press releases at MoneyWeek telling us that “within 12 months cryptocurrency will be held by one in three millennials”? We suspect not.
When will it all end? Perhaps in 2018. The global economy appears to be starting a synchronised boom. If it takes off, inflation will rise (CPI, the official target rate, is still above 3% in the UK), wages will rise and interest rates will rise. That will shake out the zombies, shake out the markets, set us on path that doesn’t constantly reflect the events of a decade ago, and, with luck, mean cheap Christmas trees for all in 2027.
Our customer-services details have also changed. You can now call us on 0330-333 9688, email firstname.lastname@example.org or write to us at Moneyweek Subscriptions, Rockwood House, Perrymount Road, Haywards Heath, West Sussex, RH16 3DH. What has not changed with our move is our commitment to provide you with excellent editorial every week. I look forward to continuing to do so!