Economy 04-07-2018

Bank of America dictates sentence for the world economy... and the result does not confort

Bank of America analysts warn that the current market situation shows that the economic crisis of 1997-1998 could be repeated soon.

The experts arrived at the discouraging conclusion after analyzing the processes in the world stock exchanges, that turned out to be similar to those of 1998, according to explains Bloomberg.

"The sustainable growth of the US economy, the balance of the yield curves of the bonds, the fall of the markets in the emerging countries ... all this is similar to the events of 20 years ago," said the main investment analyst of Bank of America, Michael Hartnett.

It was in the 90's when the dollar strengthened and revalued by 25%. Meanwhile, developing markets were in recession, just like today.

The expert of the Russian investment company Finam, Sergei Drozdov, also described as probable the resurgence of the crisis, but, according to him, it is unlikely that the collapse will occur this year.

"They [the Bank of America analysts] wrote about the 10-year cycles, and here they are right." It can be added that normally, during the end of the cycle, fuel prices, particularly oil, tend to rise, and this is what we see now but it is more likely that the crisis does not take place during this year, "he explained to Sputnik.

As for oil prices, Drozdov said that by the end of 2017 or early 2018, these could reach 90 or even 100 dollars per Brent barrel. Among other major factors that could trigger the crisis, the analyst highlighted the debt of American companies.

Drozdov added that once the crisis occurred, the Russian economy would also be affected by global processes.

"If a global crisis arises, our emerging market may be falling even more quickly," he warned.


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