Fx

According to Johannes Müller, Chief Economist of DWS Investments, the next ten to twenty years will bring 3 major changes: higher rates of inflation, weaker importance of the U.S Dollar and an increase in market volatility.

There are at least four new structural risks to consider: regulation, Middle East, euro zone’s crisis, and again the idea of a change in growth model of emerging countries.

The euro is not expected to experience abrupt movements versus the dollar whereas the yen might see a decline in 2011 and the pound is on a course towards strengthening versus both the euro and dollar

Some markets have been exhibiting dysfunctions for nearly 4 years. The flight to liquidity and compliance with solvency requirements of banks and states with financial issues, have been - and still is - only ensured by non-conventional financing provisions and emergency solutions with the creation ad-hoc structures.

This is the first part of a series consisting of 3 articles covering the perspectives of the Eurozone… In order to get out of the crisis, three scenarios are conceivable. The most probable of them is unfortunately the one where one or several countries exit the economic and monetary union.