The European Central Bank is worried about inflation - shouldn't we be too?

A monetary union without fiscal union, combined with the aftermath of a credit splurge and then vicious retrenchment, was always going to create austere conditions and unemployment - the end of which is deflation.

This is the chilling conclusion one might draw from the fact that even the ECB has now got the message and has begun to reinforce its forward guidance that rates will still be at present levels or lower for a considerable period of time. Yet even now we didn't get the Full Monty - a move to negative deposit rates is what the peripheral countries now desperately need. Before they joined the Euro they would have been able to regain some degree of competitiveness via devaluation - now the only way out for them is mass, long-term unemployment, while structural reforms to their labour markets take hold - if they ever do. A cut in the Depo rate would begin to seriously weaken the Euro, replicating the pre-Euro solution for the periphery.

After a shock to the system as large as the credit crisis, perhaps the real surprise is that this has taken so long to become evident; the scale of the inevitable de-leveraging process that was always going to have to take place would classically suggest this outcome, but then we have to add to the mix the fact that the Eurozone (13.5 per cent of global GDP in 2012), is saddled with a massively deflationary economic experiment, in the shape of the Euro.

One has to say the whole thing is becoming painfully reminiscent of the Bank of Japan's failure to take bold steps in the face of the imminent arrival of deflation in the 1990s, despite the yen’s ludicrous strength.  

A monetary union without fiscal union, combined with the aftermath of a credit splurge and then vicious retrenchment, was always going to create austere conditions and unemployment - the end of which is deflation. This is now spreading even to the core. This week's CPI figures in Germany and France will be absolutely key. Japanisation is the real danger for Europe now, and the same could start to be true in the US too, unless we see an uptick in core inflation soon. The core PCE (Personal Consumption Expenditure) deflator - the Fed’s preferred inflation measure - stands at 1.2 per cent year on year.

The establishment survey part of Friday’s US employment reports certainly contained some crumbs of comfort, but I find it hard to believe the balance of views on the FOMC will be sufficiently shifted by one set of figures, or even just by the hopefully untainted report next month, to bring tapering forward to the December meeting. Optimists also latched onto last week’s first reading of Q3 GDP, at +2.8 per cent, as another positive, but the bulk of the surprise came from a large increase in inventories; always a double-edged sword-were inventories climbing because of falling demand right now, or because manufacturers foresaw increased demand in the future? Either way the likely give-back in this quarter means growth is heading for only 1.5 per cent in Q4.

Finally though, Fed politics also mitigate against December tapering. It seems pretty clear that QE is seen as yielding diminishing returns and the monetary tool du jour is now forward guidance (love it, or think it’s dangerous like me), and the Fed would like to strengthen theirs by lowering the employment threshold for rate rises from 6.5 per cent to at least 6.0 per cent, probably 5.5 per cent. This is a normal human reaction to the scare of their lives that the Fed got this summer as 10-year yields exploded from 1.6 per cent to 3.0 per cent, slowing the housing market and dragging higher the shorter term rates that the Fed would have us believe are anchored for years to come. I believe we won’t now see QE without this enhancement of forward guidance.

With a change of Chairman coming up and wholesale changes in Fed voters six weeks after the next Fed meeting, (both Regional President rotations and new Fed Governors), this strengthening of forward guidance will look very suspect if it takes place in December and is just inherited by the "new" FOMC in January. Forward guidance is, by definition, a promise; and one of a very personal nature.

Graffiti covers a fence around the construction site of the new headquarters of the European Central Bank on August 30, 2013 in Frankfurt, Germany. Photograph: Getty Images.

Chairman of  Saxo Capital Markets Board

An Honours Graduate from Oxford University, Nick Beecroft has over 30 years of international trading experience within the financial industry, including senior Global Markets roles at Standard Chartered Bank, Deutsche Bank and Citibank. Nick was a member of the Bank of England's Foreign Exchange Joint Standing Committee.

More of his work can be found here.

Photo: Getty
Show Hide image

A rape-able sex robot makes the world more dangerous for women, not less

Eroticising a lack of consent is no answer to male sexual violence. 

On Wednesday, the Independent reported a new setting had been added to the personality range of a sex robot made by the company True Companion. Called “Frigid Farrah”, the setting allows men who own the robot to simulate rape. If you touch it in a “private area” when it is in this mode, the website explains, it will “not be appreciative of your advance”.

True Companion says the robot is not programmed to participate in a rape scenario, and the idea is “pure conjecture”. Nevertheless, the news has reopened the debate about sex robots and their relationship to consent. What does a rape-able robot say about our attitudes to consent, sex, violence and humanism? Do sex robots like Frigid Farrah eroticise and normalise male sexual aggression? Or does allowing men to “act out” these “most private sexual dreams” on inanimate objects actually make real women safer?

The idea that allowing men to “rape” robots could reduce rates of sexual violence is fundamentally flawed. Sex robot settings that eroticise a woman’s lack of consent, coupled with male aggression, risk normalising rape. It sends a message to the user that it is sexually fulfilling to violate a woman’s “No”.

It’s important to remember that rape is not a product of sexual desire. Rape is about power and domination – about violating a woman’s body and her sense of self. Raping a robot is of course preferable to raping a woman, but the fact is we need to challenge the attitudes and sense of entitlement that cause violent men to rape in the first place.

There is little evidence to back the claim that giving men sexual “outlets” reduces violence. The research that exists is focused on whether a legalised sex industry can reduce sexual assault.

Studies on Dutch “tippelzones” – spaces where soliciting is legal between certain hours – claimed the areas led to a reduction in sexual violence. However, the research lacked precise data on incidents of sexual violence and abuse, and the fact that sex workers themselves can be victims. As a result, it wasn’t possible to determine exactly how the number of rapes and assaults fell in the population at large.

Similar claims made by social scientist Catherine Hakim also failed to prove a causal link between legalised prostitution and reduced levels of sexual violence – again, because low reporting means a lack of accurate data.

Other research claims that access to the sex industry can in fact increase incidents of sexual violence. A 2013 report by Garner and Elvines for Rape Crisis South London argued that an analysis of existing research found “an overall significant positive association between pornography use and attitudes supporting violence against women in non-experimental studies”.

Meanwhile, a 2000 paper by Neil Malamuth, T Addison, and J Koss suggested that, when individuals considered at high risk of acting sexually aggressively are studied, levels of aggression are four times higher among frequent consumers of pornography.

However, just as the research fails to find a causal link between access to the sex industry and reducing violence, there is no research proving a causal link between violent pornography and gender-based violence.

Instead, we have to look at the ethical and moral principles in an industry that creates models of women for men to orgasm into. Sex robots are, at their heart, anti-humanist. They replace women with plastic and holes. They create a world for their owners where women’s voices and demands and desires and pleasures – and right to say no – are absent.

That should trouble us – we are creating products for men which send a message that the best woman is a compliant and silent one. That the best woman is one who lies back and “likes what you like, dislikes what you dislike”, to quote the True Companion website, who is “always ready to talk and play” but whose voice you can turn off whenever you want.

“By transferring one of the great evils of humanity from the real to the artificial, sex robots simply feed the demon of sexism,” says Professor Alan Winfield of the Bristol Robotics Lab. “Some might say, 'What’s the problem – a sex robot is just metal and plastic – where’s the harm?' But a 'fembot' is a sexualised representation of a woman or girl, which not only invites abusive treatment but demands it. A robot cannot give consent – thus only deepening the already chronic and dangerous objectification of real women and girls.”

What research does tell us is that there is a clear link between violence and the perpetrator’s ability to dehumanise their victims. That, and a setting designed to eroticise a woman’s lack of consent, suggest that Frigid Farrah will have no impact on reducing sexual assault. Rather, it creates a space where rape and violence is normalised and accepted.

Instead of shrugging our shoulders at this sexualisation of male violence, we should be taking action to end the belief that men are entitled to women’s bodies. That starts by saying that rape is not an inevitable part of our society, and the danger of rape cannot simply be neutralised by a robot.

Sian Norris is a writer. She blogs at sianandcrookedrib.blogspot.com and is the Founder & Director of the Bristol Women's Literature Festival. She was previously writer-in-residence at Spike Island.