Burgess: Looking at a Two-Tiered World on Inflation

The video discusses global economic conditions, focusing on inflation trends in North America and Europe. It highlights political and financial risks in Europe, particularly due to upcoming elections and undercapitalized banks. The potential mispricing of markets and the impact of a strong dollar on risk assets are analyzed. The discussion also covers market volatility, investment strategies, and complex global risks, including Chinese debt and Brexit. The overall positive momentum in markets is attributed to optimism about US growth and a looser fiscal regime.

What is the primary difference in inflation trends between North America and the rest of the world?

• North America has rising inflation pressures, while the rest of the world experiences modest inflation.

• North America has stable inflation, while the rest of the world faces deflation.

• Both North America and the rest of the world have similar inflation trends.

• North America has deflation while the rest of the world has inflation.

What is a significant political risk facing Europe in 2017?

• The rise of new political parties with mandates to leave the eurozone.

• The collapse of the European Union.

• A trade war with North America.

• The introduction of a new European currency.

How might a strong dollar impact global markets?

• It would lead to a global economic boom.

• It would have no effect on global markets.

• It could unsettle markets, particularly in Europe and emerging markets.

• It would benefit emerging markets.

What is one reason for the positive momentum in equity markets despite complex global risks?

• Investors are optimistic about US growth leading the world forward.

• The global economy is in a recession.

• There are no significant global risks.

• Investors are pessimistic about US growth.

What is a potential consequence of a gradual rise in the dollar?

• It would have no impact on the global financial system.

• It would cause a decrease in global trade.

• It could still result in market volatility.

• It would lead to a stable global market.