"A 30-50 year virtuous cycle of credit expansion which has produced outsize paranormal returns for financial assets----bonds, stocks, real estate and commodities alike----is now deleveraging because of excessive risk and the price of money at the zero-bound. We are witnessing the death of abundance and the borning of austerity, for what may be a long, long time."
This quote from Bill Gross's February comment for Pimco neatly summarizes in one sentence the main theme we have been emphasizing in our own comments for many years. Periods followed by credit crises are almost always followed by many years of below average growth, anemic expansions and frequent recessions. The most recent example is the experience of Japan since 1989. It is now happening in the U.S. and much of the world, and will not end anytime soon.
This quote from Bill Gross's February comment for Pimco neatly summarizes in one sentence the main theme we have been emphasizing in our own comments for many years. Periods followed by credit crises are almost always followed by many years of below average growth, anemic expansions and frequent recessions. The most recent example is the experience of Japan since 1989. It is now happening in the U.S. and much of the world, and will not end anytime soon.
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