2020: year of destiny, year of peril – The Property Chronicle
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2020: year of destiny, year of peril

The Economist

What a difference a year makes! And why should the calendar matter so much, if at all? Many investors began 2019 with their performance in shreds, bracing for the worst. They finished 2019 boasting that global stock markets had posted their best year since the aftermath of the financial crisis a decade ago, as investors shrugged off trade tensions and warnings of slowing growth in major economies. The MSCI World Index, which tracks stocks across the developed world, jumped by almost 24 per cent during 2019 – the strongest performance since 2009. A surge in US technology giants and a strong recovery in eurozone and Asian stocks drove the rally. So, 2020 will be more of the same?

That isn’t the view here at Economic Perspectives. We’re in the business of bounded reality, not unbounded optimism. We envisage that 2020 will be the year when chickens come home to roost, reminding us of unresolved problems, unsatisfactory remedies and unstable politics. 

The good news, possibly, is that national governments and their agencies remain dead set against an end to this mature, yet faltering, global economic expansion. The bad news is that the global credit system has an infection which is spreading rapidly, with life-threatening implications for the global economy. We expect the early year hopes of cyclical recovery to be overtaken in short order by the unintended consequences of long-standing lax credit and monetary policies.      

The Economist

About Peter Warburton

Peter Warburton

Dr Peter Warburton is director of Economic Perspectives Ltd, an international consultancy, and managing director of Halkin Services Ltd. He was economist to Ruffer LLP, an investment management company, for 15 years and spent a similar length of time in the City as economic advisor and UK economist for the investment bank Robert Fleming and at Lehman Brothers. Previously, he was an economic researcher, forecaster and lecturer at the London Business School and what is now the Cass Business School. He published Debt and Delusion in 1999. He has been a member of the IEA’s Shadow Monetary Policy Committee since its inception in 1997. He is a contributor to the Practical History of Financial Markets course run by Didasko, an education company, at Edinburgh University, and teaches occasionally at Cardiff Business School.

Articles by Peter Warburton

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