The global economy seems to be walking on water, shrugging off soaring oil prices, policy paralysis in Europe, unsustainable borrowing by the United States, and record housing prices. Is it because, as G-8 leaders would have us believe, investors are in a buoyant mood, confident in their leaders’ stewardship of the global economy? Or are we being governed by a pathology of fear, fed by events such as the recent London bombings, that is holding down long-term interest rates thereby covering up a host of simmering problems?
The global economy seems to be walking on water, shrugging off soaring oil prices, policy paralysis in Europe, unsustainable borrowing by the United States, and record housing prices. Is it because, as G-8 leaders would have us believe, investors are in a buoyant mood, confident in their leaders’ stewardship of the global economy? Or are we being governed by a pathology of fear, fed by events such as the recent London bombings, that is holding down long-term interest rates thereby covering up a host of simmering problems?