As mentioned in a previous post, the specter of global rate cuts is manifesting itself. Australia’s central bank cut 100bp and other central banks in Europe and North America are expected to follow. Other central banks may cut as well.
Inflation is now a secondary concern as this massive deflationary credit crisis emerges as a threat to global growth. IMF economists predict that global growth will slow to recessionary levels. This coordinated rate cutting is the formula central banks use to create the next bubble. We’ll see if it works.
