Who? You should probably learn the name of the head of China’s central bank. He addressed the IMF meeting over the weekend and chided developed nations for mucking up the world economy. A recent article in the Wall Street Journal mentioned some of his concerns.
…Zhou said the outlook for the global economy faces many uncertainties, calling for developed countries with “flagging economic recoveries” to put their fiscal houses in order and accelerate reform in both their financial sectors and structural issues in their economies, he said.
They need to “restore fiscal discipline as quickly as possible by formulating and implementing a comprehensive, credible, and transparent fiscal consolidation strategy and adopting measures to contain sovereign risk and avoid cross-border contagion,” said Zhou.
The current issues with Greece certainly highlight his points, but Greece is not the only developed nation to face similar sovereign debt issues. Even the U.S. (eventually) may not be immune.
Even ten years ago, it would have been inconceivable for a developing nation central banker to chide the developed world for their unsustainable fiscal practices! Yet that is what things have come to. We have a new world order, where the source of investment returns may not come from the traditional sources. A global tactical asset allocation strategy may be what is needed to adapt to the new investing environment. If your clients are concerned about instability in global markets, you may want to explore our Global Macro separate account or to look at our global allocation funds with Arrow.
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