Swimming Without Shorts in a World Awash in Liquidity

Swimming Without Shorts in a World Awash in Liquidity

Export Development Canada (EDC) launches its spring edition of the Country Risk Quarterly, a one-stop-shop country risk overview for exporters.

In the spring 2015 edition of the Country Risk Quarterly, Stuart Bergman, Deputy Chief Economist and Director of the Economic and Political Intelligence Centre, discusses the risky side effects of quantitative easing.

“Six years ago, a world that teetered on the edge of the worst economic plunge since the Great Depression was arguably rescued by a wave of massive and unprecedentedly coordinated public stimulus measures,” says Stuart.

“Among other things, central bankers of the world opened the floodgates to a surge of liquidity that would help carry a panicking global economy to the shores of relative safety. One unintended side effect of quantitative easing saw investment cash flood out of safe assets and into a number of riskier ones – including emerging market bonds, speculative currency plays, equity markets, and various commodity classes.”

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