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The "Two Dip" Clouded The Globe.

2011/8/8 13:56:00 43

The Two Time The Clouds Are Over The Globe.

The United States, like most other developed economies, has two times. Bottom The danger. US economic data, such as GDP in the first quarter, consumption index, real estate market and labor market data, are still fragile. The pace of development in the United States has been very slow. The spread of wealth effect and credit crisis will only make business, consumers and investors feel worse. While in Euro In the region, the European debt crisis is becoming more and more intense. Britain continued its economic activity for 3 quarters in a row. Japan has already had two bottom searches, perhaps only after reconstruction.

The most important difference between the past and the past is that the government has exhausted its policy power, and policymakers lack monetary policy, fiscal policy, and even can not restrain their fiscal system. That is why the present situation is even more frightening than it has been in the past few years.

Today, the government has no ability to save banks, but because banks have a risk exposure to government debt, sovereign debt risk has actually become a bank debt risk. Quantitative easing policy has been implemented in the United States, but the effect is not significant enough. Last year, QE2 and $1 trillion in extra tax cuts and transfers made the us grow 3% in the first quarter, but the remaining 3 quarter averages. Economics The growth rate is still below 1%. At the same time, under the inflationary pressure, the ECB did not intend to follow suit, nor did the BOE.

The best thing that can be expected now is a slow, less than expected "U shaped" recovery trend, because the recession is due to the financial crisis triggered by debt and leverage. We need to reduce expenditure in the private and public sectors, reduce debt and deleveraging. It will take many years and the recovery can not be achieved in the short term. In this slow process, there will be new departments or economic problems every once in a while, which will have a negative impact on the market, so market correction must be carried out immediately.

Real economy, asset price and sovereignty debt There will be a vicious circle between private debt and all these risks. All these risks will lead to more market correction, more credit spreads and more negative wealth effects on the real economy.