An economy can be said to be overheated when overall demand exceeds supply. The demand pushes prices up and in open markets, speculation adds to the pressure. Asset prices are usually a good indication of overheating, but the higher asset prices need not always be demand-driven, especially in the current global situation.
(This story appears in the 17 December, 2010 issue of Forbes India. To visit our Archives, click here.)
The thing is very simple.... a lot of money is being printed and it needs a place where it can generate some return over and above 1% floating in the west and money will keep on chasing places .... and we'll keep on reading the same article again and again.
on Dec 12, 2010