Monday, Nov 27, 2006

Serious economists say something's got to give

IMF: The Liquidity Glut

A little heavier going than your average tabloid house price story, but rather better informed. The investment bank Julius Baer put out a very interesting report today in the wake of this to which there's no link but which in essence agrees that central banks have pussy footed around while post 9/11 risk averse investors have created a self inflating prophesy by rampaging into assets. However that's been at the expense of serious long term investment into R&D and developing markets. The big boys aren't talking house price correction they're talking rebalancing between inflated asset prices and liquidity, between savings and investment and between Asia and the West. And when we wake up after the coming correction China and India will look much much much bigger than they do now.

Posted by freewheelin franklin @ 10:10 AM (438 views)
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