Sunday 7 June 2009

Merkel's inflationary fretting may wake the bears from hibernation

Telegraph
Stephen Roach, Morgan Stanley's Far East chief, ..."China's incipient rebound relies on a time-worn stimulus formula: upping the ante on infrastructure spending in anticipation of an eventual rebound of global demand," he said. The strategy cannot work this time because Americans have exhausted their credit, and their desire to borrow. Consumption will fall from its peak of 72pc of GDP to the "pre-bubble norm" of 67pc, if not more."
"David Rosenberg from Gluskins Sheff expects ....If he is right, this will shatter the surplus economies of China, Japan, and Germany, unless they adjust fast to the new world order. ....

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