The rise in U.S. interest rates may be the most significant change during the past quarter. The United States and indeed the world has been enjoying a low interest rate environment for more than a decade. Low interest rates have propped up property values world-wide and have alleviated the burden of lower pay in developed countries. With all the debt out there, higher interest rates could easily send the world into a deep recession.
Looking back over two and a half years, nothing cataclysmic has happened in the economy. That conforms to the new paradigm in the derivative era where crises are avoided until... they're not. And because of the way they were avoided, the correction, when it does come, becomes a cataclysm. The push off the cliff may happen due to forces internal to the economy or through an external shock. It is hard to imagine that we will be as lucky during the next quarter-decade, but in a non-linear environment, predictions are difficult.
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The Bishop said pro-gay laws were to blame for the floods
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Iranian President Mahmoud Ahmadinejad (R) meets his Venezuelan counterpart Hugo Chavez in Tehran July 1, 2007. |
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