Hi Ved. Love your blog. Things are looking pretty grim for the world economy. I'm of the view we are up to panic with much pain yet to come. It's likely we'll hang around in 'panic' for the rest of 2009, and then move on through to desperation late 2011. Of course each of these stages will be preceded by rallies only to make lower lows. No V, W or U type of economic recovery, rather the 'soup plate' variation. It is almost unstomachable but we could be looking at years of markets around the world effectively moving sideways as they rally, retreat, rally, retreat, and rally and retreat again - like what happened between 1960 and 1984. But of course, there is another scenario - a repeat of the 1930s!
BUT this is really a side issue. What I'm scared of is worldwide deflation! Yes most countries are printing money like there's no tomorrow (inflationary), but will this overcome the global deleveraging? It's a mess! The longer the world's banking sector remains broken, the longer their negative impact will be felt in the 'real' economy.
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Hi Ved. Love your blog. Things are looking pretty grim for the world economy. I'm of the view we are up to panic with much pain yet to come. It's likely we'll hang around in 'panic' for the rest of 2009, and then move on through to desperation late 2011. Of course each of these stages will be preceded by rallies only to make lower lows. No V, W or U type of economic recovery, rather the 'soup plate' variation. It is almost unstomachable but we could be looking at years of markets around the world effectively moving sideways as they rally, retreat, rally, retreat, and rally and retreat again - like what happened between 1960 and 1984. But of course, there is another scenario - a repeat of the 1930s!
BUT this is really a side issue. What I'm scared of is worldwide deflation! Yes most countries are printing money like there's no tomorrow (inflationary), but will this overcome the global deleveraging? It's a mess! The longer the world's banking sector remains broken, the longer their negative impact will be felt in the 'real' economy.
Matt's crying, so time for me to go!
Dave
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