It is interesting to see that many countries have adopted economic measures (e.g., fiscal stimulus and low interest rates) Japan has employed over the last two decade.
Yet, what one has to keep in mind is that this is a very different world than Japan has lived in. Japan alone has been a balance sheet recession, as a chief economist Richard Koo at Nomura Research Institue put it. But this time things are quite different.
Perhaps we may be seeing the credit ball squeeze across borders. In a way, the entire world has participated in this over-indulgence. The debt crisis in Greece may be a preview of what is to come.
Many parts of the world may have to see a private sector deleveraging some countries have already experienced and a public sector deleveraging as well at some point.
Is the sovereign default risk inevitable?
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment