Wednesday, February 2, 2011

Signals of distress.

There is recession in developed economies with no visible signs of significant growth. The Fed continues with its plan of quantitative easing. US is still limping and staggering and a lot of noise has already started to emerge to tighten the interest rates. In the Euro zone, first it was Greece and then Ireland and now the contagion has spread to Spain and Portugal. Italy is next. All that has been done so far is to bail out the distressed economies with no emphasis whatsoever on restoring growth. The EU decided in December 2010 to postpone the much-needed reforms to beyond 2013 and there are no signs by the ECB to let the Euro weaken. 
And then there is boom in emerging over populated economies and inflation heading north due to drive up in commodity prices. 
Are we, then, heading for yet another crisis!

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