Saxo Bank chief economist Steen Jakobsen said permanent imbalances in the market where only 20 percent of the economy – listed companies and banks – receive 100 per cent of available “credit and political capital”, is “suffocating” the remaining 80 per cent, which are SMEs.
“Without a transfer of money from the 20 per cent back into the 80 per cent, we will face a decade of ‘Japanisation’,” said Mr Jakobsen.
“A correction of this imbalance is essential to reset the world economy,” he said.
Mr Jakobsen explained that the consensus of most “bank economists” that a little bit of growth is enough is “worrying” and “ignores the bigger picture”.
“Bank economists were falling over themselves to proclaim 2014 as the year of recovery,” said Mr Jakobsen.
“The US needs 2.9 per cent annualised growth in Q2 to register zero growth for the first half of 2014 – and Asia continues to believe it can engineer a ‘soft landing’, something I see as the equivalent to an attempt to turn a super tanker around in a river,” he said.
“Further threats to the anticipated recovery include China’s property market and its high financing needs, growth in France or Germany plummeting thanks to lower exports to Asia, and continued elevated energy prices,” said Mr Jakobsen.
