Ruchir Sharma (right) spoke to NDTV's Prannoy Roy.
Author and global investor Ruchir Sharma spoke to NDTV's Prannoy Roy on the top economic and political trends of 2019. What should you invest in this year, what not to invest in, what should you do with your savings, will interest rates go up or down, should you be cautious in 2019 or can you go a little wild? Ruchir Sharma answers these questions and more.
Jan 08, 201921:23 (IST) "I think it was the end of easy money. The federal reserve increasing interest rates led to a lot of bubbles bursting," Ruchir Sharma says.
"One we haven't shown because it couldn't quite fit onto this graph because the scale was so huge, it was the bitcoin bubble. During this time last year, there was so much hype.. it is down more than 70 per cent over the last 12 months," he says.
"One fascinating statistic here is that there was not one major stock market in the world which in 2018 generated a positive return in dollar terms," he says.Jan 08, 201921:20 (IST)Every bubble burst in 2018. Only cash was the winner. Oil down went 20 per cent, other commodities down 10 per cent, global stocks down 8 per cent and cash up 2 per cent.
Jan 08, 201921:18 (IST)Lets have a look at top trend No. 4 of 2018: That everything is a bubble.
Jan 08, 201921:17 (IST) Last year, we had a bit of a relapse of economic growth in many parts of the world yet approval ratings ticked up a bit. Also, many new leaders came on to the surface and those new leaders are enjoying some sort of a honeymoon," Ruchir Sharma says.Jan 08, 201921:16 (IST)"There are so many influences now that what really leads to leaders being popular is so hard to gauge. And I think why we saw this bump up in approval ratings is also something which is mystifying but the basic connection is that in 2017 you had a booming global economy, record low rating of approvals of leaders," Ruchir Sharma says.
Jan 08, 201921:14 (IST)There were few people with high approval ratings. Leaders of 20 major democracies had low ratings when the economy was on a high and in 2018 these approval ratings went up when the economies were down.
Jan 08, 201921:09 (IST)Lets have a look at the third of the top ten trends of 2018: Ruchir Sharma said that there are going to be a lot of indicators that good economics might not be good politics.
Jan 08, 201921:06 (IST) "Well, Europe also disappointed. So I mean this is something that comes to you as surprise as you know because in 2017 we were finally seeing some signs that finally the sick continent, which has suffered two recessions in the space of a decade, was breaking out from its long slumber but unfortunately even Europe in 2018 disappointed… and I think that was one of the big surprises as far as I was concerned," Ruchir Sharma says.Jan 08, 201920:50 (IST)Lets have a look at what was expected to be second in the top 10 trends of 2018: That it was going to be a year of "Boom Shaka Laka" in Europe.
Jan 08, 201920:48 (IST) "The markets have been getting quite nervous across the world that in the last few weeks that… the United States with is also now showing signs of slowing down," Ruchir Sharma says.Jan 08, 201920:47 (IST)Ruchir Sharma explains why that happened. "I think that this has been a sort of surprising development in the last 12 months with every economy in the world – with the exception of the Unites States – has decelerated. I think there are some structural and some cyclical reasons for it. Then interest rates have been going up across the world, global trade has been slowing down, there is a lot of uncertainty because of the global trade battles that are going on between USA and China which we will speak about during the course of this show. And also the fact that you have demographics which are turning against the world with the large chunk of the world's population which is ageing," he says.
Jan 08, 201920:44 (IST)The first top trend was that global growth will peak in 2017-18. Data shows that global growth in 2018 actually hit 3.75% and then it did come down.
Jan 08, 201920:41 (IST)First, here's a recap of the trends that Ruchir Sharma predicted we would see in 2018.
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