Underground threats to the global economy

The global economy has been following a pretty normal course of late - with some exceptions. But it is these small nudges on the economic seismograpth which we should pay attention to.

For many months we have argued that the global economy is, despite all the hoopla, actually following a pretty normal course. Yes there are exceptions. The massive fiscal and trade deficits currently experienced by the United States are not normal and represent the tips of a very substantial economic volcano. But investors and financial market operators have grown used to this landscape of peaks and valleys and have come to accept their existence in much the same way that a multi-generational farmer clings to the slopes of, Philippine death trap, Mount Pinatubo. The farmer ekes out a living from the fertile soil aware, at the same time, that at some indeterminate point in the future this livelihood is bound to be swept away in a searing pyroclastic embrace. But for now investment vulcanologists can ease back in their deck chairs. The seismograph chatters quietly in the background, nothing untoward, the economic world is at peace and yet

Some people are just never happy! In this world of small things monitored so minutely, this world in which the slightest rustle in the hedgerow calls forth a flock of squawking, excitable, pundits babbling hyperbole like a mountain torrent, it can be quite hard properly to discern the true meaning of the almost imperceptible nudges on that same seismograph. They are, however, important and must be recognised as such if this environment in which we inhabit is to be given meaning and context provided for the future.

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