Global financial markets are witnessing a major recovery despite the continuing repercussions of the pandemic, which continues to hit the Indian economy violently and threatens a new closure cycle in the economies of Europe and Asia.
With the recovery of global financial markets, the two largest economies in the world, namely the Chinese economy, which grew by 18.3% in the first quarter of this year, and the US economy, are heading towards leading the exit cycle from the pandemic crisis in the coming months.
New York’s Mayor Bill de Blasio has said that the city will fully open for business and shopping on July 1.
Global financial markets
While the Western and Asian financial markets have been living since last March a major and continuous recovery cycle that has not been witnessed in its recent history, fears are raised about the risks of investment in the post-Corona pandemic, and what will happen to inflated asset prices after the cessation of pumping trillions of stimulus and cheap financing in the stock and bond markets.
Concerns are raised because the current recovery cycle is described by many financial experts as an “artificial recovery cycle”. This means that it is a boom cycle not made by market supply and demand factors, but rather by governments and central banks that were on the brink of the most dangerous cycle of financial collapse and economic depression.
Although financial experts believe that the intervention of central banks and governments was necessary to save the world from bankruptcy, it represents one of the biggest pitfalls that threaten the course of investment in the future.
A Wall Street Journal analysis suggests that there are many risky scenarios regarding the inflated assets will suffer from a sharp correction in their prices.
According to the newspaper’s data, stock prices rose to their highest levels since the of bubble dot-com companies. At the same time, house prices rose in America and Britain to levels they were before the global money crisis in 2007.
Last year saw the biggest test for investors, because the wealthy and long-term self-employed who had the ability to invest in the long term gained the most from the major turmoil in the market.