Finance

Big picture of global economy in 2011 is the velocity of a structured opportunities and threats that represent two sides of same coin. The world economy has been through a period of positive growth that is better than forecast since the Great Resession in 2008-2009, led by rapid growth in developing countries, which trigger new investment opportunities. But the west's economy is still struggling through a consumer credit bubbles in the U.S. and UK, real estate sector across the country just as the U.S., Ireland and Spain, and at global banks and private equity, which flourished in the late 2000s,

As a result of the interplay of relationships between old and new world, and global policy response to the crisis, there are three new areas in which an opportunity, and bubbles, have emerged: western public sector debt, overheating in the developing world and the inequalities of global currencies.

Public Debt
Problems euro zone juxtaposed against the ballooning U.S. financial gap. Socialization default EU countries and U.S. depression / deflation risk has been supporting investor demand for yield at the end of 2010. From a global perspective on the longer term, the U.S. fiscal outlook is troubling, along with the growing debt on the balance sheet-related financial bailout Germany became an integral part of the euro zone financial architecture, and the persistence of UK inflation premium, rising interest rates threaten real estate with negative implications to western government debt / GDP ratio and the flow of private sector credit.

Overheating In Developing Countries
In the short term, positive effects of increasing domestic wages, higher equity, a strong flow of credit, and appreciation of the yuan becomes a sign for China's domestic demand and the velocity of global optimism. U.S. fiscal and monetary stimulus, to the tightening measures in developing countries, prompted investors to think again about the balance of economic power in 2011 to support the U.S.. However, global liquidity flow of dollars into developing countries will trigger domestic inflation pressures and the appreciation of local assets. As a result of overheating of China is a major thread that will determine the future direction of the global economy.

Global Currency War
Easing the role of the euro and the dollar as the main currency, the euro zone because of the crisis and easing U.S. monetary and fiscal policies, will support the attractiveness of developing country currencies. However, the opposite reaction from developing countries against the U.S. global stimulus through the tightening of domestic and application of capital controls provide increased fragmentation of the global financial threats and trigger a liquidity imbalance between new and existing markets. (RS)