In an interview with Yahoo Tech Ticker this morning, Martin Wolf, the chief economic commentator at The Financial Times, was cautiously optimistic about the world financial system's recovery. Cautiously optimistic, that is, about everything except the prospect for broad, global inflation.
Wolf argued that even though we currently have a "short to medium term deflation problem," if it becomes clear that "the U.S. government and British government will never mange their public debt problems," then "there could be a real flight from these currencies and that would generate, as it did in the 70s, worldwide inflation."
While economies around the world appear to be improving, he cautioned that "It's going to feel quite depressing, [with] high unemployment...for probably two, three, four years to come."
But he saw some positive signs in China. Wolf said that while China alone doesn't have the economic power to "pull the world economy out of this," the monetary figures in China indicate that their stimulus program, at least, "seems to be working."
To see the full interview, WATCH:
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