BIS radars indicate storm

Article: 'Gathering storm' for global economy as markets lose faith

“Underlying some of the turbulence was market participants’ growing concern over the dwindling options for policy support in the face of the weakening growth outlook,” the report said. “With fiscal space tight and structural policies largely dormant, central bank measures were seen to be approaching their limits.” This is possibly one example of what this article restates again and again. This article draws attention mainly to the fact that the BIS hosts concern on whether governments around the world have any sort of fiscal policy leverage left. In addition, the BIS is afraid that even though things globally have seemed to level off, that there is worse to come and that global governments have used up all possible flexibility with fiscal policy.  The article uses Japan as an example of running out of options hinting that the negative interest rates that Japan has implemented are possibly their last ditch effort and consequentially last line of defense. Basically to sum everything up the article says this period of “tranquility” is only the calm before the storm.

http://www.theguardian.com/business/2016/mar/07/gathering-storm-for-global-economy-as-markets-lose-faith