Opinion

The Great Debate

from The Great Debate UK:

Double dip a done deal?

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-Jane Foley is research director at Forex.com. The opinions expressed are her own.-

Earlier this week the S&P 500 was down 15 percent from its April 2010 high.   The ongoing debate on whether the U.S. economy is poised for a double dip recession can be linked with these falls.

At present there is insufficient evidence to conclude that the U.S. economy will fall back into recession, though there are signs that the recovery could be losing momentum.  A key question is whether the adjustment in asset prices seen since the end of April has been appropriate.

Proponents of double-dip imply that asset prices may have further to fall.  In contrast, die hard bulls suggest that equity valuations are looking cheap.  In the past few sessions, the bulls have been gaining the upper hand.

The reining in of government fiscal incentives and in many cases the implementation of austerity measures suggests that economic growth in most of the developed world will be constrained for the next few years.

from The Great Debate UK:

Women on course to control larger proportion of wealth

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- Jane Foley is research director at Forex.com and blogs regularly for Reuters Great Debate. The opinions expressed are her own. Reuters will host a “follow-the-sun” live blog on Monday, March 8, 2010, International Women’s Day. Please tune in. -

Projections indicate that by 2050 the world’s population will stand at around 9.2 billion, up from around 6.7 million at present.  The vast majority of this increase will be in the developing world.  In developed world countries populations may start tapering off after 2025.

It seems likely that this explosion in population in the developing world will do nothing to address the fact that that per capita wealth is massively skewed towards the developed world.  Using World Bank data for 2000, the average per capital wealth in the top 10 wealthiest countries is a staggering 170 times greater than the average in the bottom ten.
Demographics in the developed world are defined by low fertility and low mortality rates.  This translates into an ageing population.  Added to this mix is the fact that male mortality rates are higher than female in the developed world.  As a consequence, as these populations age they are becoming predominantly female.  It follows that women are on course to control an increasing proportion of the world’s wealth.
Reports that suggest that women are responsible for buying 80 percent of household goods in the U.S. will not be a surprise to the seasoned shopper.  Over the past decade or so it appears that the advertising industry has been waking up to the notion that women’s responsibilities stretch further than making decisions on washing powder.

from The Great Debate UK:

Tides may turn in the forex market into 2010

JaneFoley.JPG-Jane Foley is research director at Forex.com. The opinions expressed are her own.-

The final weeks of 2009 have brought a sense that tides may be turning in the foreign exchange market reflecting broader developments in the global economy. The predominant changes relate to the dollar.

December’s 5 percent recovery in the USD index is linked to an improved outlook for the U.S. economy.

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