Another global crisis looms, says expert

By Doris Dumlao
Philippine Daily Inquirer

VISITING INVESTMENT GURU Mark Mobius warned that the rapid growth of money supply and lax regulation on derivatives could lead to another global financial crisis in the future.

Mobius, executive chair of Templeton Asset Management Ltd. and considered to be one of the world’s most influential asset managers, said liquidity growth that could induce inflation and unbridled growth of derivatives were the two “big elephants” in the global investment area.

“As you know, elephants can be very gentle and they can also be very wild and destructive,” the Singapore-based Mobius said in a briefing before addressing delegates to the 9th Annual Pacific Region Investment Conference in Manila.

On one hand, he said, rapid growth of money supply across the globe—partly due to the stimulus packages released by governments—was helping the world rebound from a recession, giving people extra money to spend and invest in stock markets.

But he said excess liquidity could also create inflation.

Once inflation starts to creep in, most central banks will certainly raise interest rates, he said. Read More...