February 25, 2020

2008 once more? The world may be headed for another global economic crisis

...For some years now, many analysts have believed that the next major global crisis would start in China, because it was suspected to be hugely overleveraged; equally, if not more important, nobody knew what was really going on. However, with central banks keeping the money feed so easy, markets all over the world kept rising.

Judging from the way equity markets are behaving today, could that time have come?

It is, perhaps, significant that the long rally in US equities since the taper tantrum in 2015 was interrupted only when Trump began braying about a trade war with China in 2018. The Dow fell 15% in a couple of weeks, highlighting the fact that the health of the US economy—and certainly US equity markets—is very tightly linked to the China relationship

Read more at https://www.financialexpress.com/opinion/2008-once-more-the-world-may-be-headed-for-another-global-economic-crisis/1877962/

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