Ever since the late 1990s, Albert Edwards has been warning that the West is heading for a repeat of the Japanese experience, with debt and deflation causing an “Ice Age” in equity markets and economies. It’s starting to look as though he may have a point.
Stocks have gone sideways since the late 1990s, and have got much cheaper. They will get much cheaper still, says Edwards in a Société Générale note, as investors have yet to twig that “we are only one short recession away” from deflation.
Most developed countries’ inflation rates are below 1.5% and the trend [...]
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