Commentary on Political Economy

Thursday 8 September 2011

Central Banks and Politics

Another two useful little summaries from Karen Maley about the growing tensions between central banks and governments as the role of the former becomes more politicised. You would have noticed how global equity markets (though still volatile) have grown more "optimistic" of late, expecting "miracles" from governments. In reality, stock markets will plunge very soon as governments run out of options in the eurozone: it will be either default or recapitalisation of French and German banks. Ouch!! The problem is that "profitability" is falling and the Great Moderation is a thing of the past as China becomes the disaster it always threatened to become. There will be true political convulsions in China that will be very unpredictable. REMEMBER

No comments:

Post a Comment