Four years after the financial crisis began and the world has certainly not returned to normal.  No major developed economy has yet fully regained the output lost during the recession and global share prices remain almost a third lower than their peak prior to the crisis. – BBC

by Chris Williamson Chief economist at global financial information firm Markit – BBC

EXCERPTS:

Recent events, including stock market falls, the escalating sovereign debt crises, US credit rating downgrade and a near-stalling of growth in the developed world is leading increasing numbers of experts to wonder if the world is facing some fundamental changes.

If stage one of the crisis involved the transfer of liabilities from the financial sector to governments via bank bailouts, stage two is witnessing transfers from weaker governments to stronger governments, as the latter seek to prevent the former from defaulting and causing more financial turmoil.

Increasing numbers of analysts are questioning the survival of the euro due to the political tensions.

The Chinese authorities are now calling for a new world reserve currency to replace the US dollar following S&P’s downgrade.

The greenback and the euro may never again be the strong currencies they were before the crisis struck (assuming the euro survives).

FULL ARTICLE

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