The Monthly Review: N.6 2025

Michele De Michelis expresses surprise at the calmness of financial markets despite recent serious geopolitical events (such as the attacks between Israel, Iran, and the US). He questions whether investors have suddenly become rational or if markets are now being manipulated—possibly through technological tools that suppress extreme reactions. He casts doubt on the true efficiency of markets and suggests there may be hidden controls damping volatility. He also highlights looming risks such as the expiration of tariff extensions and Japan’s economic situation, which could bring an end to the carry trade and lead to a strong yen, potentially becoming a more effective safe haven than U.S. Treasury bonds.