The world has changed. Not just the climate but also its economic system.
Global markets were sold down at the beginning of the year due to fear of hard landing of China economy as well as continuous falling in oil price.
Is the world economy so bad? Or we simply have high expectations? What can the major powerful houses do? 4 major forces that dictate how the world should go. They are the U.S., Europe, China and Japan. Don't underestimate the son of the Sun - Japan. They may have lost the second world war but one should not underpin its influence and force.
on 29 Jan 2016, the Bank of Japan announced negative interest rate in order to revive its economy, a crazy move cited by many. What was the effect? Immediately, global financial markets reacted positively with all indices in the world rallied. We like zero or rather super low interest rate, aren't we?
Over at Europe, the ECB is going to announce another round of QE pretty soon, a more aggressive one than previous one. What will be the result? Euro will weaken and global stock markets will rally. Printing money and devalues its currency seems to be the only tool used by the central banks around the world.
The fear of hard landing of China economy is uncalled for. Thanks to the media of spreading fear, many people got panic. China has slowed down compared last time but that doesn't mean that it is in a recession. It is merely growing at a slower pace, not no growth. That's the main difference.
Last but not least, the U.S., the no. 1 powerhouse of the world. It has achieved full employment rate which is around 5%. GDP has grown modestly. It has achieved almost towards the end of the expansion path if you look at the charts. Therefore, slower growth is expected going forward.