Four Hidden Dangers Threaten Global Economic Operation

In recent days, the latest economic outlook report released by the United Nations, the organization for economic cooperation and development and credit insurers pointed out that the global economy is facing stagflation pressure and the collapse of the US dollar, thanks to the slow economic recovery of the developed countries.

Developed countries become weakness

The report of the 25 world economic situation and outlook released by the United Nations on the 2011 day warned that the global economic recovery is still fragile, if some developed countries can not properly handle themselves.

The "no power" of the developed economies will drag on the development of emerging economies in the future.

The report points out that even for Asian and Latin American emerging economies such as China, Brazil and India, economic development is still facing some pressure, and there may be a slowdown.

These pressures include inflation, asset price bubbles, and

The report from the United Nations Department of economic and social affairs and the joint China World Trade Center conference pointed out that the developed countries have become the soft spot of the global economic recovery, and the unemployment rate in these countries is still a problem.

According to the current economic growth, the unemployment rate in developed countries should return to the level before the financial crisis, four to five years.

Worries about stagflation risk are coincidentally. The latest economic outlook report released by OECD on 25 points out that the world is affected by the rise in commodity prices and the fiscal deterioration of some developed countries. Although the self sustainability of economic recovery is enhanced and inflation pressure continues to increase, it may cause stagflation.

According to the OECD, the Central Bank of the world should tighten monetary policy in the next two years in the face of rising inflation pressure.

The OECD also raised the inflation rate of its 34 member countries in 2011, rising from 1.5% to 2.3%, raising the inflation rate from 1.4% to 1.7% in 2012.

The group said long-term inflation expectations are rising, suggesting that the trend of overall inflation in the near future will continue to a certain extent longer than expected.

Therefore, the group recommends that the Central Bank of the world should consider tightening monetary policy to cope with it.

The OECD believes that developed countries should start tightening monetary policy.

The US Federal Reserve should raise its key interest rates to 1% to 1.25% by the end of the year, and move forward to 2.25% by the end of 2012. The Bank of England should raise its key interest rate to 1% by the end of the year, and advance to 2.25% at the end of 2012.

For countries that have tightened monetary policy, such as Canada, Sweden and Norway, as well as large developing countries, we should speed up the pace of raising interest rates.

Another major reason for the threat of global economic contraction is the fermentation of debt crisis.

According to the OECD, the US and Japan have been unable to solve their financial difficulties. The eurozone is dominated by neighboring countries, but if we look at the overall information, we will find that the core countries are also beginning to reduce their debt.

The risk of US dollar collapse is looming.

"The risk of the collapse of the dollar is still hidden". The new hidden danger in the global economic and financial market also comes from the UN's 25 day economic outlook report.

R obV OS, a senior UN economist who has participated in the report, said that if emerging markets "start selling dollars in large numbers, you will face the risk of a US dollar crash."

"We are not saying that the collapse of the US dollar is imminent, but all kinds of factors are being further accumulated, while other aspects have not been improved rapidly. For example, the risk of us default, the collapse of the US dollar will soon come to an end."

He said.

Statistics show that the exchange rate of the US dollar against a basket of other major currencies has reached its lowest level since 1970s.

According to the UN report, the weakening trend of the US dollar has been developing in the near future. This is partly due to the spread between the United States and other major economies, as well as the heightened concerns about the sustainability of public debt in the United States, while half of US public debt is held by foreign countries.

"Therefore, the expected decrease in the book value of huge foreign exchange reserve assets will lead to a crisis of confidence in the reserve currency, thus putting the whole global financial system in jeopardy."

The report says.

Trade payment risks

26, one of the largest credit insurance companies in the world, on the world trade risk forum 2011, hints that credit risk in international trade in the post crisis era deserves the attention of trade enterprises.

The "national trade risk" report released by the company on the same day reminds the euro zone countries that the debt crisis will threaten the operation of the relevant foreign trade enterprises.

The report suggests: "trade risks in the euro area will affect the company through 3 main ways: distrust of the environment, public spending cuts and the difficulty of obtaining credit because European banks are deeply in sovereign risk.

In 2011, due to the fiscal integration of the Monetary Union countries, European enterprises are likely to be trapped by the banking channels, and the claims and debts are entangled, while banks lack enthusiasm for accelerating the resumption of credit supply.

Jean-Marc P illu, chief executive of the company, said: "from 2010 to 2012, international trade will grow at a rate of two digits.

However, in 2009, the economic blow to the main entities was very large, and the confidence of entrepreneurs or enterprises had not yet fully recovered before the crisis.

At the same time, the external environment of enterprises also has a more serious state, including the bank's credit requirements will be very strict, especially some small and medium enterprises, they get cash more and more difficult.

Some countries now have a rating of A 3 (political and economic environment is somewhat unstable, which may affect the payment behavior of enterprises), that is to say, their current economy is still in a very uncertain state, and there are many unstable factors.

Including the UK and Italy, for example, Italy's economic growth was very slow in the first quarter.

Of course, some countries are still in the economic crisis. The sovereign risks of these countries have a great impact on the economic entities of the country, and their ratings are relatively low.

Ireland, Iceland and Portugal, for example, have seen a serious economic crisis in Portugal recently.

The country's trade risk rating is the average risk of a country's business in its business pactions. The rating is based on the macroeconomic indicators, political and economic conditions of each country, including the experience of trade payment and analysis of business prosperity.