After a big decline between February and June, consensus forecasts for global growth have stabilised, recent data suggests. Global equity markets have therefore continued their recovery path, fuelled by central banks lowering rates and the gradual reopening of some economies after lockdowns.
The general lack of concern is caused by the belief that the authorities can successfully manage excessive government debt levels through innovative policies. In 1947 world-renowned economist Abba Lerner argued that very high government debt does not have to end in default. The interest burden that government incurs can be met by ... printing money.
he Latin American debt crisis of the 1980s, the Asia financial crisis of the late 1990s, and the global financial crisis of 2007-2009. Investing is a challenging exercise when faced with unchartered waters, particularly for benchmark-cognisant domestic equity investors. However, the most important thing is to focus on getting a few basics right.