Global Financial Markets

Interest rates are rising, government deficits are growing and tensions around France are building. This is no coincidence: it is the result of years of debt-driven growth as a response to cheap imports from China. In this report we explain why this build-up of debt is now stalling, what a possible way out looks like and what this means for the main interest rates, currencies and equity markets.

For years, inflation was low, allowing central banks to pursue an increasingly loose monetary policy and drive up the prices of real estate, equities, and bonds. Now that China's rapid development and the rise of new technology are rapidly reshaping the world order, this era is coming under pressure and structural weaknesses in the West are being exposed. In this report, we explain why this foundation is faltering and what it means for the key financial markets.

Modern technology and cheap imports from emerging markets are causing a split in the West: a small group that profits from rising asset prices, and a majority whose purchasing power is falling behind. That anger is now translating into a strong rise of populist parties, leaving governments ineffectual. In this report we show how this divide emerged and what the consequences are for the key interest rates and currencies.