Business Eye: Things are starting to get very risky...

Alex Pratt
Alex Pratt
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Whether we enjoy a bet or not we all place them every day in one way or another.

Your pension fund and savings hinge on a series of someone else’s gambles, deciding to chase a customer for an order means weighing up the odds of success and gambling your time and costs, and even driving off in a hire car without testing the brakes is glibly placing a bet with your life.

When the risks are low and outcome differentials small, business leaders who manage to stay in business learn to master the risk-reward game and can place safer bets.

However, when the risks start to assume abnormal proportions, the degree of uncertainty spins out of control, and our ability to influence events is negligible, we can inadvertently take on hidden risks for which we are unprepared.

It should be of serious concern to everyone that the European Central Bank had to cut its benchmark interest rate last week to just 0.05%.

It is practically zero for a reason, and not least because the economies of Italy, Greece, Spain, and Portugal have entered a period of falling prices.

The real prospect of deflation is upon us. Only the economies of Zimbabwe and Haiti have for instance been growing slower than that of Italy. Growth in China and the US is slowing and even the German economy is shrinking. In Ukraine we face the real possibility of an escalating war with Russia; according to the Prime Minister ISIS is the “greatest and deepest” terror threat in our history; who knows what we face if the Scots vote for Independence or if UKIP hold the balance of power after the General Election; and probably most significant of all we risk the real possibility of an Ebola pandemic.

Closer to home, being brutally beheaded in your own home, arrested for taking your child for specialist cancer treatment and finding fake legal threatening debt collection letters from the major banks on your doormat bring a heightened sense of risk to us all.

I guess it’s time for a Monty Python moment and to look on the bright side of life.

Happy days.