Societe Generale's chief global strategist, Albert Edwards, is known for his gloomy outlook on the markets. The self-proclaimed "uber-bear" warned in 1996 that Western economies and equities were in danger of following Japan into a deflationary bust. He now thinks we may be in line for an even bigger crash.
Central banks just don't learn, says Edwards. China is the latest example of "loose money" inflating a stock bubble and ending in tears, but it is merely a small preview of what's to come.
"I have not one scintilla of doubt" that central banks, having blown up the bubble again, have laid the foundations of "an even bigger version of the 2008 Great Financial Crisis/Recession". Only this time, the authorities won't be able to cut interest rates or up government spending to combat the fallout. As a result, quantitative easing will be stepped up significantly. You'll "hear the roar of the printing presses from Mars".
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
But there's one shaft of light in the gloom: gold. Gold has taken a hit lately and the recent price slump could continue as low as $900 per ounce, but bulls won't be fazed. For them, the dip is a welcome prelude to "lift-off".
-
Investing in pharmaceutical companies? The pipeline is keyA strong pipeline is all-important for pharmaceutical companies. We highlight the most interesting candidates.
-
RICS: Property sales rise as interest rates fall and stamp duty hike loomsEstate agents are feeling bullish about the market, with house prices forecast to rise over the next three months. But difficulties continue to mount for renters
