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How the Fed and Trump can save the world economy in 2019

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It is often said that the darkest hour is just before the dawn. For eternal optimists, there is always hope that morning brings something brighter, more promising. Global markets have had a lot thrown at them in recent years, from the 2008 crash and Great Recession to the European debt crisis, but they have always managed to bounce back, thanks to global policymakers’ ingenuity. But, as the New Year unfolds, investors must be asking what there is to hope for as a new uncertainty dawns.

There’s a new kid on the block threatening markets – and it is called the Great Confusion. With ultra-low interest rates unwinding, quantitative easing finished, fiscal austerity back in vogue and the US-China trade war deepening, it is no surprise confusion reigns, investors are in a quandary and markets are slipping into chaos and disorder. Roller-coaster stock markets say it all: the world is in deep turmoil and needs saving. A surging Volatility Index – the market’s renowned fear gauge – is the only winner in all of this.

It is always useful to take stock and consider the options. Investors can either join the stampede and hunker down in the nearest safe bunker or consider the........

© South China Morning Post