首页
外语
计算机
考研
公务员
职业资格
财经
工程
司法
医学
专升本
自考
实用职业技能
登录
外语
Bears in the Woods Despite the troubled markets, the world economy is still relatively strong. Just don’t bet your house on
Bears in the Woods Despite the troubled markets, the world economy is still relatively strong. Just don’t bet your house on
admin
2010-01-10
30
问题
Bears in the Woods
Despite the troubled markets, the world economy is still relatively strong. Just don’t bet your house on it.
The woods and the market
If you meet a bear in the woods, try not to panic or scream; on no account should you turn your back and run. As markets around the world have turned grizzly over the past two weeks, some investors seem to have forgotten the old hikers’ maxim. After three years of big gains, many stockmarkets have dropped by 10% or more in less than ten days. The loudest complaints have echoed around emerging markets and commodities. Europe has surrendered most of this year’s gains. Americans have so far escaped lightly, but they would be unwise to take comfort. Their housing market, the recent rock of their economy, is where a much grizzlier creature lies in wait.
Most investors tend to look first at equity markets---and they have certainly had a good run virtually everywhere. Yet a repeat of the slump after the bursting of the dotcom bubble in 2001--4)2 remains highly unlikely. In 2000 shares were wildly overvalued. Today price/earnings ratios in most stockmarkets are near, if not below, their long-term averages. This suggests that the slide in shares could be short-lived.
Inflation or interest rates?
So what has caused this burst of volatility? One popular explanation points to the fears of rising inflation and hence higher interest rates. Yet this sits oddly with the decrease in bond yields and the gold price over the past week: if inflation were the reason, you would expect both to have risen. The real puzzle is not why volatility has suddenly increased, but why it had been so low in the past year or so. The answer seems to be an abundance of cheap money, which attracted investors into satisfaction. Now they are starting to demand higher returns on riskier assets. Emerging-market equities, not (generally safer) bonds, suffered the biggest loss in the past week. It could be a healthy correction, though.
What helped us to achieve growth with low inflation?
Indeed, the recent sensitivity need not harm the world economy, which even bears admit has performed greatly. World GDP has grown at an annual rate of more than 4% for 11 consecutive quarters. This is the strongest upturn for more than 30 years. Yet global inflation remains historically low. Strong growth with mild inflation is all the more amazing given the tripling of oil prices since 2003. Past off-price shocks have caused stagflation.
The world has so far shrugged off higher oil prices with the help of two powerful economic forces. The first is the opening up and integration into the world economy of China, India and other emerging economies, This has given the biggest boost to global supply since the industrial revolution.
That, in mm, has magnified the second stimulus. Since the bursting of the dotcom bubble, central banks have pumped out cheap money. In 2003 average short-term interest rates in the G7 economies fell to their lowest in recorded history. Because inflation remained low, the central banks have been slow to mop up the excess liquidity. Cheap money has encouraged households, especially American ones, to borrow and spend lavishly. It is not just house prices that have surged ahead; cheap money has encouraged investors across the world to take bigger risks, creating several smaller bubbles. Together the huge boost to supply (from emerging economies) and the huge boost to demand (from easy money) have offset the burden of higher oil prices, creating the once-impossible combination of robust growth and modest inflation.
Don’t panic
The era of cheap money is nearing an end. For the first time in 15 years, the three big central banks are now all tightening monetary policy. The European Central Bank has already followed the Federal Reserve’s lead in raising interest rates. Only now are the markets realising that interest rates may rise by more than they had expected. In the long term, rates should be roughly equal to nominal GDP growth, but in America and elsewhere they are still well below it. Optimists argue that America’s economy is coping well with rising interest rates, but it isn’t really aware of tight money yet. Without easy credit, dear oil will cause more pain.
Until recently, financial markets appeared to be betting that the Goldilocks economy—neither too hot, nor too cold — was safe from the bears. The troubled markets are a reminder that sooner or later growth will slow or inflation will rise. Inflation is not about to spiral upwards but with diminishing spare capacity, it could gradually rise. America has an extra risk because Wall Street suspects that Ben Bernanke, the Fed’s new chairman, may be a soft touch on inflation. If that suspicion persists, he will need to raise interest rates by more than otherwise—or investors will do the tightening for him by pushing up bond yields. That would make other assets look expensive.
It is in the American housing market that the bear may growl loudest. By borrowing against the surging prices of their homes, American consumers have been able to keep on spending. The housing market is already coming off the boil. If prices merely flatten, the economy could slow sharply as consumer spending and construction are squeezed. If house prices fall as a result of higher bond yields, the American economy could even dip into recession. Less spending and more saving is just what America needs to reduce its current-account deficit, but for American households used to years of plenty it will hurt.
The confidence
For the world, it is best that America slows today. Later, imbalances will loom even larger. A few years ago, Japan and the euro-area economies were flat on their backs. Now they are growing "above trend", so the world depends less on America than it once did. The boost to the world economy from China and India will last into the future, even allowing for mishaps. Wise investors should resist the urge to flee, reduce their holdings of risky assets and stare down the bear.
During the recent economic down turn, South American countries have almost lost all their gains in the previous years of robust development.
选项
A、Y
B、N
C、NG
答案
C
解析
文章中没有出现过South American这个专有名词,另外,根据前半句的关键词定位,首段信息中也没有谈到这些国家,因此判断此题为文章没有提到的内容
转载请注明原文地址:https://kaotiyun.com/show/hWt7777K
0
大学英语四级
相关试题推荐
Forthispart,youareallowed30minutestowriteacompositiononthetopicOnaHarmoniousDormitoryLife.Youshouldwritea
A、Itshouldbeavoided.B、Itisuniversalamongparents.C、Itsetsupdangerousstatesofworryinthechild.D、Itwillmakehim
A、Shedoesn’thavetimetomove.B、Shewouldhavedifficultyinfindinganotherapartment.C、She’spaidherrentforthesummer
PaulT.Rankinfoundthattheaverageindividualspentmostofhiswakingtimeeitherreading,writing,speakingorlistening.
Fearisanemotiondevelopedfromlifeexperienceratherthananinbornnatureofhumans.Childrenwithseparationanxietymay
A、6.5hours.B、8hours.C、7.5hours.D、3hours.CHowlongdidthetourlast?
A、BecausetheIndiansalsoeducateyoungwomen.B、BecausetheIndianshaddifferentgoalsofeducation.C、BecausetheIndiansta
TheenormousgrowthofAmericaneconomyhasbeen【B1】tomanyfactors.ThesizeoftheUnitedStatesandits【B2】resourceshavebee
A、Teachingassistantship.B、Student’sloanfromabank.C、Apart-timejobasatourguide.D、Four-yearscholarship.D根据对话中“Well,
Whetherleadersarebornormadehasbeenasubjectofintensedebatealmostsincethebeginningoftime.But,withcurrentmana
随机试题
颅内压增高症治疗时抬高床头
以程序控制为基础的计算机结构是由冯·诺依曼最早提出的。()
利用声影对于以下哪项病变诊断无帮助:
青年男性,腰痛,腰僵硬,渐出现驼背,X线见骶髂关节模糊,间隙消失。最支持诊断的检查
苦参薄层色谱法鉴别中的对照品为
某事业单位以结余资金购入一般设备,用于专业业务活动,价款已用银行存款付讫,则进行账务处理时应使用的会计科目有()。
甲商场为增值税一般纳税人,2018年2月发生下列业务:(1)从小规模纳税人处购入材料一批,取得普通发票上注明的价税合计金额30000元。(2)从某增值税一般纳税人处购进货物,取得普通发票,支付价税合计金额46800元,支付运输企业(
群体决策的优点有()。
清廷于1910年颁布的《法院编制法》对于中国传统司法体制和审判制度进行重大改革。该法所确立法律原则和制度包括()。(2018多50、2018法多30)
Questions29-40•Readtheinformationaboutthecommunicationofinformationinbusiness.•Choosethecorrectwordtofi
最新回复
(
0
)