I posted earlier on: Barclays on the "Politics of Rage" - will slow economic growth
If you are after more on this, Bloomberg have this piece up: Barclays Warns 'Politics of Rage' Will Slow Global Growth
The outlook for currencies is mixed:
- the currency dynamics of a sharp rise in protectionism in the U.S. are unique
- "The fiscal cliff and debt downgrade revealed that bad policy choices in the U.S. still result in safe haven inflows"
- "Higher tariffs might have a similar impact: U.S. assets are likely to benefit from a flight to safety or flight to quality bid in the face of a global stagflationary shock."
- And there's the rub: If major advanced economies erect trade restrictions at the same time, the net impact on relative exchange rates and the outlook for carry trades-if interest-rate differentials stay constant-might be limited even as global output stages a downturn
