Tags: Morgan | Stanley | Global | Recovery

Morgan Stanley’s Roach: Global Recovery in Jeopardy

Wednesday, 23 Nov 2011 02:39 PM

Morgan Stanley Asia non-executive chairman Stephen Roach warns that political instability in the United States and Europe poses great risk to the world economy.

"For the second time in three years, global economic recovery is at risk,” Roach told a roundtable meeting with the news media. “In 2008, it was all about the subprime crisis made in America. Today, it is the sovereign debt crisis in Europe."

"The alarm bells should be ringing loud and clear across Asia."

Roach called President Barack Obama's recent tough comments on China's currency policy an ominous sign for "current disturbing political developments."

Roach fears that the anticurrency-manipulation bill approved by the U.S. Senate last month would get passed by both houses and be signed by Obama.

"I am hopeful the president's statement in Hawaii is purely motivated by his political consideration," says Roach. "[If he signed it,] it would be terrible news for China and the broad economy in the world."

"Currency policy doesn't square with economic theories and fact. We [the United States] run deficits with 88 countries, including China. We have a multilateral problem here," Roach says.

"By putting pressure on one, we can't have our problem fixed."

Rebalancing the U.S. economy includes increasing the national savings rate, says Roach. 

"The U.S. economy has a lot of strengths, but no major country has a net negative saving ratio as it does,” he says.

“Saving is future. So until that changes, I will continue to be concerned about the U.S."

Reuters reports that U.S. consumer spending barely rose October as households took advantage of the largest increase in income in seven months to rebuild their savings, which rose at an annual rate of $400.2 billion from $376.9 billion in September.

© 2017 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
StreetTalk
Morgan Stanley Asia non-executive chairman Stephen Roach warns that political instability in the United States and Europe poses great risk to the world economy. For the second time in three years, global economic recovery is at risk, Roach told a roundtable meeting with...
Morgan,Stanley,Global,Recovery
287
2011-39-23
Wednesday, 23 Nov 2011 02:39 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved