Even before the debates on estimates of cost of sub-crisis are subdued, a new debate has started whether economies across the world are reviving. At least in India we have got enough reasons to believe so- a significant rise in IIP index, increased freight movement across ports, companies going on hiring spree etc. The pace at which banks were collapsing at one time has been shadowed by the pace at which economies around the world are recovering now.
A large part of this fast paced recovery should be attributed to governments across the world which have left no stone unturned in paying honest tax-payers money to crooked institutions. From Greenspan’s cheap money to Bernake’s cheap money has been a scintillating and fast journey. And mind you this is not applicable to one or two countries alone; this has been the trend everywhere. Globalization in true terms!!
But what signal is it sending to the companies? Go and enjoy the world till the sun is shining; when there will be night some Fed will come to save you. “If you were not taking risk and making money, you have been a fool, is the message which companies are getting by all this”- says a noted economist. But I have just a correction to make here. “If you wanna take risk, which is not even comprehensible to yourself, please make sure that your size is big enough.”
Small fishes are not entertained here – Fed Reserves.
Very Aptly put sunil!
ReplyDeleteBasic rule of economics starts from economy of scale. Small fishes are never entertained in economics. It can be seen in the difference IMF has treated recession of 2008 and 1997 Asian Currency Crisis. 97 IMF cried for regulation and control, 2008 it is for pumping more money.
Picking from you only:
Small fishes are not entertained here-IMF
-
Tanveer Chauhan
Ph.D, Global Business and Economics, JNU