Albert Edwards: the financial ice age is coming

Ultra bear Albert Edwards told a conference in London this month that yields on US government debt will slide below zero percent during the next recession.

Albert Edwards, the ultra-bearish global strategist at French bank Socit Gnrale, has argued for many years now that the world is facing a financial "ice age", with the developed world following Japan into an era of collapsing bond yields and flattening equity prices. He hasn't changed his mind yet, telling a conference in London this month that yields on US government debt will slide below zero percent during the next recession.

Advertisement - Article continues below

That next recession is shaping up to be a painful one, given high levels of corporate debt among US companies. But the US is not the only one in trouble. China is still struggling, and in Europe, Italy led by populists including Matteo Salvini is the big danger, says Edwards. Unusually, the European Union (EU) is less popular among the young than among the old in Italy, and so Italian hostility towards the EU is only set to grow. 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". That could come once a deep recession forces politicians to be even more radical than they've already been perhaps by printing money to fund public spending directly, for example. But for now, his message remains the same "the world is ending". Keep some money in cash and gold.




How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019

As full lockdown ends, what are the risks for investors?

In the UK and elsewhere, people are gradually being let off the leash as the lockdown begins to end. John Stepek looks at what risks remain for invest…
29 May 2020
Emerging markets

Can Hong Kong survive as a financial hub?

As Beijing tightens the screws on Hong Kong, many fear the death of the territory's autonomy – and of its status as a global financial hub.
28 May 2020
Share tips

Building a new world: profit from the global post-Covid infrastructure spending spree

The crisis is far from over, but many of the world’s largest economies are already looking to the future, and the odds are that infrastructure spendin…
28 May 2020

Most Popular

Industrial metals

Governments’ money-printing mania bodes well for base metals

Money is being printed like there is no tomorrow. Much of it will be used to pay for infrastructure projects – and that will be good for metals, says …
27 May 2020
EU Economy

Here’s why investors should care about the EU’s plan to tackle Covid-19

The EU's €750bn rescue package makes a break-up of the eurozone much less likely. John Stepek explains why the scheme is such a big deal, and what it …
28 May 2020

In support of active fund management

We’re fans of passive investing here at MoneyWeek. But active fund management has its place too, says Merryn Somerset Webb.
25 May 2020