Felix Zulauf, founder of Switzerland's Zulauf Asset Management, predicted trouble in 2008. Early last year he also forecast an equities rally spurred by central-bank action. So what does he see happening next? The rally is getting long in the tooth, he tells Barron's. It seems likely to peter out by the end of the summer when the problems accompanying the multi-year, post-bubble deleveraging process will "be back on the table".
American growth looks set to disappoint; the US faces "more fiscal drag" than other countries in 2013, and consumer income is growing slowly. Then there's the ongoing euro crisis. Because the struggling peripheral states can't boost exports by letting their currencies fall, they can't grow, and austerity imposed by policymakers will eventually spur a revolt.
"You can send people into poverty for a while, but there is a limit." With a rapid move to political and fiscal union unlikely, the odds are that, in the long term, "some countries could break out of the euro and devalue their currencies".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Meanwhile, with France's economy looking increasingly uncompetitive, "there is a good chance that France will be the next problem". Another worry is a currency war.
-
Do you qualify for the Winter Fuel Payment if you live abroad?The Winter Fuel Payment will be means tested for expats living in Europe, in line with the new rules impacting those in the UK. But a quirk in the system means not all countries are eligible.
-
What the Employment Rights Bill means for your jobNew workplace reforms are set to give employees new rights to benefits and flexible working
