August 18, 2010

depressing talk just to depress the world?

A company called Ideas First has been inserting advertisements in major dailies. One of their main articles is: world economic problems - mountain being made out of molehill.

In simple economic terms, this advt tries to argue that the world is not going to crumble the way economic doomsayers throughout the world are predicting. Some points are worth noticing:
  • There is no problem of liquidity: liquidity is there in the system because the world is saving a lot. It is there whether or not central banks are creating liquidity.
  • Present EU problems will not hurt because they [and the world] are prepared in advance to handle them. It is not like the East Asian countries a decade back, where a bubble was allowed to bloat and then it burst suddenly.
  • Financial gurus are focussing on negatives and predicting a doom while in the past they have not been able to predict recession. So it is just gloom talk.
  • Who is right, the financial gurus [who are critical of countries that are printing money to raise liquidity] or the rating agencies [who give these very countries a stable rating]? Both can't be correct.
Their detailed paper is available here.

No comments:

Post a Comment