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People and MarketsComment

Staggering debts and stagflation


This week Keeping Tabs looks at the financial factors that drove some European clubs to try and create a breakaway super league, and what might be driving inflation other than the pandemic recovery.

There is little that grates many European ears more than Americans talking about or involving themselves in football, or soccer as they prefer to call it. Sometimes, that can result in something comedic, like the sitcom Ted Lasso, about an American manager of an English football team; or even clever self-parody as Budweiser successfully attempted with its promotion of its sponsorship of the Premier League.

Until now, the nadir of the US soccerball experience has probably been Diana Ross's penalty kick at the 1994 World Cup opening ceremony. But the car crash of an attempt this week by a number of US owners of some of Europe's biggest football clubs in league — in more ways than one — with other owners such as Real Madrid president Florentino Perez and Juventus's chairman Andrea Agnelli to create a European Super League is surely a nadir whose depths will never be reached again.

The idea to create a US-style league showed that clearly none of the club owners concerned had learned a thing from Budweiser's prophecy — an advert that now seems to football what Orwell's Nineteen Eighty-Four should have been to totalitarian regimes.

But sometimes, Americans provide moments of the sublime in football, including some of the best analysis as to why this catastrophe came to pass in the first place. Naturally, it is still slightly jarring to read the beautiful game in American idioms but this discussion among staffers at FiveThirtyEight about how a bleak picture for club finances drove the desire to break away is a fascinating insight.

Condemnation of the European Super League flared up quickly and was almost universal. But a much longer running and contentious debate is around the path of inflation. (Nice segue, Ed)

US Treasury yields shot up during the first part of the year far quicker than many expected as prospects of a strong US recovery — and accompanying inflation — rose.

There are plenty of people who have focussed only on the pandemic recovery, the US government’s stimulus packages and have concluded this is all just a flash in the pan.

Not so Nouriel Roubini, the economist. He thinks that there are plenty of forces that could drive inflation up from trade wars and deglobalisation, to aging populations and populist politics.