Salient to Investors:

Eswar Prasad at Cornell and Brookings said:

  • The US economic numbers looks good and the recovery is strengthening, but the rest of the world is weakening and there is a real fear Ebola could become something bigger.
  • Policy-makers in the rest of the world have no room to move, and Germany, France and Italy have stalled. Draghi has no room on fiscal policy because of the huge amount of debt, while reforms to labor and product markets are not working well. Same for Japan and China is slowing.
  • The global economy remains weak, and the US alone cannot sustain itself.
  • Virtually every currency in the world other than the renminbi is weakening against the dollar so the question is how long can the dollar hold on against this background?
  • The strong dollar will hurt exports and jobs and make this recovery very difficult to sustain.
  • Ultimately the US stock market is a good place to invest.

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