Image by YoTuT via FlickrThe Tale of Two Economies:
We have two different stories regarding inflation in the emerging vs advanced economies. The emerging economies don't share the same pressures that the advanced economies and as a result may have a different agenda for domestic consumption.
Some countries in the advanced economies have deflation as a real threat while the emerging economies they are continuing to experience over five per cent on an annual basis.
Prices of many commodities fell during the financial market shocks in May and early June, reflecting in part expectations for weakened global demand. Prices recovered some ground more recently, as concern about the real spillovers of the financial turbulence has eased. At the same time, waning appetite for risk prompted gold prices to settle higher. In line with futures market developments, the IMF’s baseline petroleum price projection has been revised down to $75.3 a barrel for 2010 and $77.5 a barrel for 2011 (from $80 and $83, respectively, in the April 2010 WEO). Projections for the non fuel commodity price index have remained broadly unchanged, partly reflecting stronger-than-expected market conditions through April. - World Economic Outlook Activity
Several in the G8 or G20 did not experience the same level destruction of economic activity in the global recession. Each country will act in their own self interest in maximize their own economy. Canada is well positioned to take advantage of the vast natural resources, democratic institutions and a determination to build on the global economic trade with China and Europe.
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