2011 outlook
January 2011
The efforts of central banks and governments in developed economies to deal with the aftermath of the global credit crisis have brought some near-term successes; economic activity has generally recovered from post-crisis levels, and asset markets have been mostly buoyant. In the long term, it is doubtful how effective those efforts will be in counteracting the extensive deleveraging (debt repayment) required in the 'mature' economies but, for the time being, such efforts are likely to be significant in determining economic and financial-market conditions, as negative real interest rates counteract investors' unease about the scale of deleveraging required in the developed world.
The puzzle facing investors in reconciling the sway of accommodative policymaking (and its scope to cause both 'improvements' and profound distortions in economies and financial markets) with the debt-related difficulties in much of the developed world is complex. In this article, we discuss the principal themes that we think dominate the outlook for investors in 2011 - all change, fire risks and global realignment - and we explore the likely implications of those themes for bond, equity and currency markets.
To read the full content, please download
2011 outlook
