The Milken Institute Global Conference attracts some of the biggest names in the financial world, the same wealthy wheelers and dealers we have long been told have been doing quite well in the new, global winner-take-all economy.
But even these folks are growing increasingly concerned about the state of global growth, as evidenced by a panel Monday morning that kicked off the annual confab. The panel featured some of the biggest names in banking and finance tackling the state of the global economy and the pressure points, from negative rates in the wealthy world, to whipsawing volatility in places that were once the engine of the post-crisis world like China.
Mohamed El-Erian, Chief Economic Advisor for Allianz, argued that the future of the world economy is more uncertain now than ever, as developed world central banks run out of ammunition to goose the economy. On top of that, the emerging world’s model of exporting commodities and manufactured goods to the rich world is looking increasingly unviable, with demand in rich markets like Europe and Japan flatlining. “The growth model of the advanced world is getting exhausted, and the emerging world’s is getting contaminated,” El-Erian quipped.
Jay Hooley, Chairman and CEO of State Street Corporation concurred, arguing that “we are almost at the end of the road in terms of tools that central banks have.” With rates in the United States hovering just above zero, and those in many other advanced economies in negative territory, Hooley expressed little confidence that Fed officials here in the U.S. and their counterparts abroad would have the wherewithal to drag the wealthy world quickly out of the next recession.
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SOURCE: Fortune
Chris Matthews
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