A New Global Recession? No way

That’s the argument made by Thomas Exner in Die Welt.  And he makes a pretty good case:

If we take developments on the stock market as an indicator for future development of the real economy, the result might well be a panic attack. Investors’ grave uncertainties would particularly affect exporting countries.

But here’s another way of looking at things: investors who were careless for far too long over-reacted to Eurozone problems and the downgrading of the US credit rating. And while concern about the state of world economic affairs is certainly justified, as long as there are no liquidity shortages and blocked credits — as there were during the bank crisis – a worldwide recession is unlikely.

At the end of the day, the decisive longer-term growth engine – emerging countries joining the top ranks of the world economy – is still intact, although there are some warning signs of over-heating. The marked sinking of oil and commodity prices as a result of the crisis will at the very least dampen that.

You can read the full post here.

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