Market of Discord

August 23, 2012

 
The current global financial picture not only relates to banking regulation and liquidity — such as discussed in the Future of Finance panel — but has been shaped by questions concerning sovereign debt (Europe) and national economic recovery ( The United States). These two factors have produced a series of interrelated effects. First, sovereign nations themselves – Greece, Ireland, Spain and Italy – have come to look like the banking sector of 2008. Second, as a result of a flight to safety away from these now risky assets, so-called ‘safe’ currencies such as the Swiss Franc and Japanese Yen, have required intervention. Finally, as a result of demand from emerging nations, and possibly government stockpiling, commodity prices such as oil and foodstuffs remain at record highs. How then can this global macro turbulence be balanced? How can nations both rein in debt and keep their currencies competitive enough to maintain trade? In short, what does the future of the global financial system look like given these factors? What actions can individual investors take to find alternative assets that provide returns during volatile times?