Article;
http://economictimes.indiatimes.com/news/international-business/another-financial-crisis-brewing-mark-mobius/articleshow/8654314.cms
Comment;
Mobius said another financial crisis is inevitable which holds some truth but not in places it is thought to occur. Means the US and Europe. They are facing crisis but of a different kind. The US is trying to keep its economy afloat form the past recession which depends on inflation and inflationary expectation. However, it is in a comfortable zone, below 5%. But, the economic expansion depends on the rate of population growth, as far as growth economics is concerned. The economy is likely to grow with a difference of population growth rate minus frictional unemployment which is respectively 9.7% and 5% and the remainder is 4.7%. When the US economy will grow it will grow 4.75 to 5% remaining other fiscal expenditure constant which adds to money supply. As far as, Europe is in question it several economies are already in recession which is creating problems and uncertainty for the Euro area. The main problem is Euro, which they are using to manage both areas, areas with recession and then areas which are not experiencing the problem. Then, the focus come to emerging economies like India, China, and, Japan. The common problem of these areas is inflation. The Indian Central Bank has increased interest interest rate several time during the last year and looks committed to reduce inflation. China is also doing the same but is in a kind of boom mainly because of soaring exports and housing prices. We can not reject the idea of recession in the making. Japan's woe is reconstruction.
http://economictimes.indiatimes.com/news/international-business/another-financial-crisis-brewing-mark-mobius/articleshow/8654314.cms
Comment;
Mobius said another financial crisis is inevitable which holds some truth but not in places it is thought to occur. Means the US and Europe. They are facing crisis but of a different kind. The US is trying to keep its economy afloat form the past recession which depends on inflation and inflationary expectation. However, it is in a comfortable zone, below 5%. But, the economic expansion depends on the rate of population growth, as far as growth economics is concerned. The economy is likely to grow with a difference of population growth rate minus frictional unemployment which is respectively 9.7% and 5% and the remainder is 4.7%. When the US economy will grow it will grow 4.75 to 5% remaining other fiscal expenditure constant which adds to money supply. As far as, Europe is in question it several economies are already in recession which is creating problems and uncertainty for the Euro area. The main problem is Euro, which they are using to manage both areas, areas with recession and then areas which are not experiencing the problem. Then, the focus come to emerging economies like India, China, and, Japan. The common problem of these areas is inflation. The Indian Central Bank has increased interest interest rate several time during the last year and looks committed to reduce inflation. China is also doing the same but is in a kind of boom mainly because of soaring exports and housing prices. We can not reject the idea of recession in the making. Japan's woe is reconstruction.
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