Tuesday, October 27, 2009

Back to the future 

When I graduated from university in the 70s, we were in a recession, there were no jobs, we had inflation, nobody was building stuff, the stock market was poor, the economy was sort of limping along, yadda yadda.
So here I am approaching retirement and in a Globe and Mail article about what's next for the economy, I read this:
“Investors must recognize that if assets appreciate with nominal gross domestic product, a 4-5 per cent return is about all they can expect even with abnormally low policy rates,” [bond fund manager Bill Gross] said. “Rage, rage against this conclusion if you wish, but the six-month rally in risk assets … is likely at its pinnacle.”
Mr. Gross and his Pimco colleagues dismiss the prospects for a traditional V-shaped recovery and warn that the U.S. is facing a “new normal” of tight credit, higher inflation, slow growth and elevated unemployment levels.
Seems to me this is where I came in.

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