Goldman Sachs Warns "Financial Armageddon"

Did Goldman Sachs just warn of financial armageddon? Crisis has moved into its third act, say Wall St soothsayers

Goldman Sachs analysts have warned that the financial crisis has moved into its third phase, caused by slower growth in China and other emerging economies.

Analysts at the top Wall St firm believe that low commodity prices, stalling growth in China and other emerging economies, and low global inflation bode ill for global markets.

Central banks all turned to lower interest rates in response to the first two debt-fuelled disasters – the 2008 banking collapse and European sovereign-debt crisis – encouraging investors to lend in emerging markets such as China for a better return.

The Goldman Sachs analysts concluded: "With bond yields in real terms close to zero, and policy rates at historical lows, this extraordinary combination of events has raised concerns about the sustainability of the financial returns on a forward-looking basis, particularly if deflationary forces continue to develop."

[link to www.ibtimes.co.uk]




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