Financial Futures and the Global Economy

There are clear indications that the global economy is in recovery. However, it is also clear that the improvement is an uneven one from a geographical point of view. For example, the recovery in China's economy actually appears to be moving to beyond just recovery. In fact, there is talk that China's economy is approaching the bubble stage. China's Customs Bureau reported that exports increased 45.7% in February from the year ago period, when the median guess called for a 38.3% advance. China reported that their inflation level hit a 16 month high and new loans were more than anticipated. This prompted fears that China could withdraw some of their economic stimulus. In addition, there is a growing belief that China's central bank will increase reserve ratios or interest rates in the near future.

The euro zone economy was beginning to show some signs of life until the sovereign debt default risk of holding Greece's debt came to the forefront. Investor sentiment quickly turned negative due to the sovereign debt issue, but is now improving, as it appears that the worst of the Greek sovereign debt crisis is out of the way. French President Sarkozy promised support for Greece, when he said the euro zone is ready to rescue Greece, if the government needs additional assistance in an effort to limit their massive budget deficit. Recently, the government of Greece passed an additional round of austerity measures and many analysts believe that Greece is doing as much as they are able to do now. There were press reports that Greece may get a $75 billion bailout from the European Union. (more)