10. The recovery
There is an ancient Chinese curse that says "may you live in interesting times" and, ironically, the country that has probably emerged the strongest from the global recession is China.
2009 has certainly been an ‘interesting' year, with the world suffering its most profound economic crisis since the Great Depression. While complicit in the disaster, western governments and central banks have also been instrumental in minimizing its damage, by bailing out banks and loosening monetary policy as far as it will go.
But let's not break out the champagne just yet. Our governments are all in the kind of debt not seen since the Second World War and interest rates have to be raised eventually.
The problem is timing; if we start raising taxes or interest rates or laying-off public sector workers too quickly too soon, the recovery will collapse. On the other hand, if we wait too long to to this, we risk creating yet another asset bubble and falling into the same boom and bust trap we did after the dotcom bubble burst.
The best-case scenario is very gradual growth and a nice, boring economic year. The converse is a double-dip recession, with the world even less able to deal with it than it was a year ago.
Fingers crossed.
