Capital fright! Five monstrous scenarios facing investors

M&G Bond Vigilante Anthony Doyle presents five charts, each "more scary than the last".

1. Capital fright Uncertainty in Europe is having a significant impact on investor and consumer confidence. This is manifesting itself in a flight to quality for capital, which the below chart highlights rather well. Most economists agree that capital flight may destabilise financial markets, raise a country's borrowing costs, reduces a country's tax base, and can have major ramifications for the domestic banking system. If capital is the lifeblood of an economy, then the blood is draining out of the peripheral economies. (click on graph to enlarge in new window)       ...