|Tipping points- (15.1.03)|
The Economist recently pointed out a potential phenomenon in UK politics, the tipping point. The idea was that the Tories appear to still be as badly off as ever, but that this cannot last. At some point there is a tipping point, which may only be caused by a little thing, from which their fortunes will not look back.
Whilst there is some political desperation in this hope, perhaps the concept should be applied to some of the economic situations currently around. The Japanese economy would appear as bad as ever in its deflationary spiral, however there is some evidence in our manufacturing ratings that a tipping point out of this is about to be reached. The UK housing market deserves a managed come down from the high rates of growth seen in 2002, but the tipping point would be something that turned slower growth into a price crash. For the US, maybe this should be a tipping point when there is a realisation that George Bush's middle income tax cuts area policy rooted in the 1980's and may have the opposite from the intended effect now. If this doesn't come too late, there may still be time to avoid the inevitable huge budget deficit.