Reporting from MIPIM 2011 Day 2:
Recovery from the global financial crisis took hold in early March 2009, when US central bank told the world that they will make sure the financial market would not crash, said economists on Wednesday's keynote panel on economics and the road map to the future.
Interest rates are as low as the can go, and inflation also quite low, meaning that real rates are very low. The natural course of events is a very strong economic upswing that will grow in strength over time (though not stronger than 2010). But increases in interest rates and oil prices are needed in order to slow down the now rapid economic expansion in the westerns world.
Real estate will benefit from the recovery because real estate is generally highly correlated to the broader economy. But real estate investors are still nervous. Real estate was an attractive asset class in the years leading up to the crash, and it still is really, notwithstanding the full impact of Solvency II which remains to be seen.
The sleeping tiger is massive government debt that will have to be addressed with higher taxes and lower spending which have a particularly negative affect on the recovery, already on a "rocky road."
We'll have more from Day 3 at MIPIM a little later today here on the Viewpoint and on Twitter @UW_GraaskampCtr.
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