Since the start of the year, the rather modest moves in the markets, whether currency, equities, interest  rates, or commodities have had a calming influence on global investors and have been a welcome  change for government authorities around the world, but the realities underlying this quiet market are  continuing to deteriorate at an extremely fast pace.

In this letter over the next few months, we plan to  outline our idea that the world is currently in the eye of this powerful financial storm and that it will rage  again for many months ahead, and that the global economy is just at the beginning of a recession that  will take the form of a powerful winter Nor’easter in the US like the ones of 1962 or 1978, or for  Europeans like the North Sea flood of 1953.

Everyone recovered from these storms, but their impact lingered for years and has been remembered for generations. The same will be true for the economic  recession that is just beginning. An economic and political maelstrom like this should be an exciting  time for forecasting, and it is valuable to think widely, assessing many ideas, but the risk of drawing  some conclusions that turn out to be laughers is high. But without risk, there is no reward.


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