Category

Markets

Summary

This Critical Issues Forum from PortfolioConstruction Conference 2009 argued that post Global Financial Crisis recession-busting policy measures may aggravate and prolong the problem.  Non-financial credit growth declined from an annual rate of 16% in late 2006 to between 1% and 2% in 2009 while deleveraging is ongoing among financial intermediaries - all of which is extremely negative for an economy addicted to credit growth. The US Federal Reserve can keep Fed fund rates at 0% and pursue even more expansionary monetary policies, while fiscal measures can be expanded, too - however such policy measures may aggravate and prolong the problem. The consumer is in recession and the recession will deepen. But there IS light at the end of this tunnel.

Presenter

Dr Marc Faber
Editor & Publisher
Gloom, Boom, Doom Report
(Hong Kong)