Australian investors face continuing challenges amid ongoing global uncertainty, according to leading consultant and author Satyajit Das.
Das, who was one of the earliest commentators to warn of the global financial crisis, has told the Conference of Major Superannuation Funds there is a long way to go on the road to recovery.
Das pointed to high levels of debt as being the major worry and queried those who pointed to the so-called “green shoots of recovery”.
“My general advice about green shoots is not to smoke them,” he said.
Das said investors needed to distinguish between the recovery underway in the financial economy and what was happening in the real economy.
He said the only real difference between the “great depression” of the 1920s and the “great recession” of today was the amount of government stimulus pumped into the global economy.
However, he said the reality was that private sector debt had simply been replaced by government debt.
“Debt has not been reduced,” he said.
Das said that it was in these circumstances that the problems in Greece were likely to be the first of a number of similar problems.
He said the recovery experienced in 2009 was a patchy recovery and that when government spending was extracted from the equation it could be seen as very weak.
