Oct 17th 2011, 18:18 by The Economist online
How you invest your money depends on what you think is going to happen to the global economy. Our correspondents discuss four scenarios
In this blog, our Buttonwood columnist grapples with the ever-changing financial markets and the motley crew who earn their living by attempting to master them. The blog is named after the 1792 agreement that regulated the informal brokerage conducted under a buttonwood tree on Wall Street.
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By investing in somewhere that is in a crisis you are not investing in their misery, you are actually helping them. The smart and moral thing to do is to invest in stocks that have become bargains but will, you have reason to believe, rebound. That will help them — and in the long run you too. That may feel “counter-intuitive.” After all you are getting a bargain at what seems like their expense. But most firms will actually welcome it.
So we have low yield, and probable slow GDP improvement. Stocks and bonds are both likely to lose ground to inflation.
Gamesmith94134: the Instability of Inequality
“Any economic model that does not properly address inequality will eventually face a crisis of legitimacy.” Each economic model failed respectively on the macroeconomical system since the scale of supply and demand have been altered by the regulations or manipulation after the globalization. Macroeconomic and microeconomic had took a cakewalk whenever the competition appears, because each applications have a contradiction as shifts in the scale from the market and state; as just as you descripted in, “The increase in private- and public-sector leverage and the related asset and credit bubbles are partly the result of inequality.
Perhaps, you may mixed with the atmospherical force on an explosion and implosion of a balloon that microeconomical strategies became irrelevence that supply and demand is not react to each other like America. When it met its macroecomonics in the price strucrtures, The emerging market nations created another price structure that made the baloon collapsed under the pressure of competition and its market shrinks by its agregated demand even after the quantitive easing I & II. First, Mediocre income growth for everyone but the rich in the last few decades opened a gap between incomes and spending aspirations. It concurs with a lack of economic dynamism that led to sclerotic growth then and the eurozone’s sovereign-debt crisis now. Secondly, price structure collapsed,and deflationary to adjust became the catalyst to its implosion since America or the Anglo-Saxon countries, the response was to democratize credit that were not fully financed by taxes, fueling public deficits and debt. In both cases, debt levels eventually became unsustainable.
In the part of China or India, low currency exchange rate and low labor cost may not made the best of the product available in its contest of quality; but the aggregated demand from China, India and US combined make the conbustion on price that inflation is changing the status of the currency exchange rate and labor cost to rise. In addition, the high rise of price creates hardship for those are below the rising living standard since they live on salary; and, which polarized the rich and the poor more. With the pressure of the macroecomonic on surplus and workforce, it must face the inequality of the middle class is driving the inflation to eyelevel of its governments. So, more price control and more regulation is put in the situation to halt its price system to synchonize with the developed nations. Its price structrure exploded its price limits after the demoncratize credits is put into contest with its economical developments. Besides, the aggregated demand rose significantly above the level of supply. Then, living standard elevates that created the short fall for the poor.
In turn of atmospheric pressures in the free market system, we complete with state and private development. When the soveriegnty confronts each other, it is how the O2 turn O3. It became the sunscreen even the sun ray is not coming through----it is just a mere reflection and it is how stable we are now. At present, rule and regulations are kites floating in the sky and it became instability even for economists. Many cannot take their breath in O3. When economists juggle how much rubber is in the balloon is required to the skin of the balloon; they confused themselves when it blast or collapse. Since the globalization is an application of a chain reaction of balloons that interact to each reaction in the macroecomonic model. As the power of the middle class in micro economic model, if you attempt to restore, you must know which side of the rubber you are taking; ”Burgernomics” is the closest crisis I know of its legitimacy; it is the common dinominator on how the Macdonald hamburger is sold and consume in continents. Relativity is the rubber to the balloon that both micoeconomics and macroeconomics apply and interact in the creation of its chain reaction on competition in the sense of globalization. More O3?
May the Buddha bless you?
the shock is still on, 204 trillion $ wanted by USA see the screwd eceonomy and who did thsi 70% is CPI gone and we still are on roads no one is waving a red flag.No one is stopping these folks 307 triilion $ is a loan USA has to pay USA may default in paying the loans. There have been around 800 Occupy Wall Street protestors arrested since the movement began, and all of them are ready to head to court. The New York Daily News reported that the protestors' defense lawyers from the National Lawyer's Guild have asked New York City to drop the charges against the occupiers or they will refuse to settle and bring all 800 cases to court. Protestors are also planning on marching to every trial if the district attorney continues to prosecute cases - starting with the November 15 court date already set for 60 occupiers.Typically, for people who are arrested for the first time, prosecutors are likely to offer an "adjournment in contemplation of dismissal," which dismisses charges if there is not another arrest within six months. This is well reported and alarming, the real estate, crises, less cash in our pocket , but the warning came too late with the book “After Shock” with 4 bursting and the $ is still dropping to unsustainable level but the freedom to the citizens. I thank you Firozali A.Mulla DBA