By Daniel Lacalle
Liquidity injections and zero interest rate policies disguise risk and may give a false sense of security. This risk could not be more evident today. Not only have we seen large downgrades to consensus growth estimates and central banks' expectations of GDP and inflation, leading indicators also point to a much weaker economy ahead.
There are similarities with 2008 that we should not ignore.
- A massive China stimulus inflates risky assets and commodities.
- Poor macro and earnings data is ignored by markets assuming that all will improve in the second half of