Albert Edwards Ice Age Thesis

Albert Edwards Ice Age Thesis-54
He's always thinking the market is going to blow up, and that major indexes like the S&P 500 and the Dow Jones Industrial Average are heading far, far lower. He's also playing a much longer game than most investors, many of whom consider a few months long term.

He's always thinking the market is going to blow up, and that major indexes like the S&P 500 and the Dow Jones Industrial Average are heading far, far lower. He's also playing a much longer game than most investors, many of whom consider a few months long term.

He's been predicting an Ice Age for a while now, basically what he describes as a "global deflationary bust" which upends the financial world as we know it, destroys wealth, jobs, and just about everything else. today, while the Dow Jones Industrial Average has gained 73.43 points, or 0.3%, to 24,831.55. But sometimes it pays to pay attention to the worst-case scenario.

And he thinks it's finally arrived, even sooner than he thought. It all starts with the trade war that could be brewing between the U.

Edwards blames the strictures of the euro, which keeps labour costs and thus unemployment high, hitting younger workers hardest.

As Buttonwood notes in The Economist, there are hints from Edwards that a “post-ice age era” will dawn, “in which bonds are to be avoided and inflation hedges are the thing to own”.

Mr Edwards is no more sanguine about other economies.

The risks of a hard landing in China have not abated. Mr Edwards cites a survey that shows how younger Italians are far more hostile to the European Union than older ones. “Fat-cat ”, a policy (favoured by Jeremy Corbyn, leader of the opposition Labour Party in Britain) of personal tax cuts paid for by printing money. When recession bites, “Corbyn will be seen as a moderate!He has scarcely had a good word since for the established church of central banking.In the early noughties, when a callow Buttonwood was a colleague, he charged Alan Greenspan, the Federal Reserve chairman, with near-criminal negligence for his easy-money policy.There were hints at the bear-fest of a post-Ice-Age era, in which bonds are to be avoided and inflation hedges are the thing to own. Société Générale's Albert Edwards is what we call a perma-bear. "But it looks as if it might be arriving sooner than we had anticipated." Edwards has, of course, been making such claims for a while now, but he hasn't always been wrong either. For more than two decades, latterly as global strategist at Société Générale, he has been a steadfast prophet of gloom.As he stood to address the 400 or so investors gathered at his annual conference (or “bear-fest”) in London this week, he made a typically confident forecast. “So we’ll be sure to get you away by five o’clock.”That was the only cheerful prediction of the day.In at least one sense Mr Edwards is already vindicated. His pet themes of disinflation, the dangers of debt, the vices of central bankers and the perils of complacency are now also found in the Power Point packs of rival strategists. In this he resembles an old-school Marxist or a modern-day Eurosceptic.They all believe that in the end they will be proved right; the twists and turns in the meantime are of minor importance.

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