The coming crisis

In the past few years, expanding global liquidity has fueled global economic growth. The global economy expanded at an annual average of 4.5% for the period 2003-2004, representing the fastest growth rate since after the Iranian revolution, in the early 1980s. This period saw growth outpacing the United States’s productivity boom phase of 1994-1999. Not surprisingly, growth in global corporate profits accelerated, resulting in a synchronized rally in world financial markets.

However, the party may just be coming to an end as global growth is likely to decelerate significantly this year