- The SocGen strategist says the West is about to be hit by a wave of deflation from emerging market economies and that central banks were unaware of the disaster about to hit them.
- “I realize most people think I am talking utter garbage but I’m used to that. And maybe I am! But the truth will come out in the next recession which may be pretty close now,” Edwards says.
- “The previous bear market low was in March 2009 when the S&P reached 666. I think we’ll go below that within this bear market.
- “Developments in the global economy will push the U.S. back into recession. The financial crisis will reawaken. It will be every bit as bad as in 2008-09 and it will turn very ugly indeed.
- “Emerging market currencies are still in freefall. The U.S. corporate sector is being crushed by the appreciation of the dollar.
- He says the U.S. economy is in far worse shape than the Fed realizes: “We have seen massive credit expansion in the U.S. This is not for real economic activity; it is borrowing to finance share buybacks.”
- Edwards attacked the “incredible conceit” of central bankers, who had failed to learn the lessons of the housing bubble that led to the financial crisis and slump of 2008-09. “They didn’t understand the system then and they don’t understand how they are screwing up again. Deflation is upon us and the central banks can’t see it.”
- Note: Edwards's "Ice Age" thesis goes back to Aug. 2008, and was reiterated in Dec. 2009, Sept. 2011, and May 2012.
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