Debt, Defaults, Disinflation & Demographics: How to survive and prosper during the coming market meltdown of 2016-2017.
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This book is aimed at the person in the street. It seeks to explain what has happened to global economies and markets since the GFC, and to forewarn them of another episode in the making. It is designed to be easy to read, and combines many charts to display it's contentions. It's warnings around global asset markets and economies are particularly important.
Mount Macedon, VIC, Australia, Januray 25, 2016 /PressReleasePing/ --
From: Antipodean Capital Management P/L, Director of Strategy, Craig Ferguson.
Book Release: Debt, Defaults, Disinflation & Demographics: How to survive and prosper during the coming market meltdown of 2016-2017.
Our contention is that the 2 year window of 2016-2017 will see the next global recessionary phase, in which stocks will fall again by 50-60%, residential property by between 10-30%, commodities and most non USD FX rates will keep falling despite substantial falls already, and cash rates in those countries where they are not at zero already will fall towards zero. Persistent debt build ups in the developed and emerging world, combined with growth depressive demographics will foster a disinflationary cycle where sovereign government defaults again become the norm. In addition, the normal maturing of the US economic cycle, combined with a misguided set of central bank monetary policies, will contribute to the downturn.
This book is aimed at the person in the street. It seeks to explain what has happened to global economies and markets since the GFC, and to forewarn them of another episode in the making. It is designed to be easy to read, and combines many charts to display it's contentions. It's warnings around global asset markets and economies are particularly important.
As Antipodean Capital's Director of Strategy Craig Ferguson states, "There's a time to be bullish, and a time to be more circumspect and bearish, when investing. We sense circumspection will pay benefits between now and 2017-2018".
Ferguson argues that a combination of both natural cyclical forces, policy mistakes by global central bankers, and structural problems around the global debt build-up and demographic decay explain why the coming downturn will be particularly severe. Downgrades of sovereign government debt ratings like we have seen in recent years with Greece and the EU nations will again become the norm. Sovereign defaults will also increase in number during the next crisis. Ultimately the reason asset markets will fall especially hard is not just due to the increase in global debt to GDP ratio's, but also due to the fact that with fiscal deficits so high, and monetary policy globally at or near the zero bound, policy makers have no flexibility left in their fiscal and monetary instruments with which to respond and ameliorate the normal decline in financial asset prices that typically occurs in recessionary circumstances. This lack of flexibility will accentuate, not alleviate, the falls in financial assets.
Ferguson draws on an array of graphical work and research sources to highlight his contention. On the debt issue, he outlines how most of the world has debt to GDP ratio's above 90%, the point at which is starts to impact growth and consumption. The Emerging world is particularly vulnerable this time around. In addition, the current cycle has all the hallmarks of a very damaging cycle - rapid credit build up, high capital mobility, vulnerability to commodity cycles, and irrational behaviour of borrowers.
The demographic issue is particularly worrying. Ferguson outlines how falling fertility rates imply slowing population growth rates in coming decades, compared with those of the last 25 years. Rising dependants per worker imply a world of reduced production and consumption rates. Lower consumption and growth implies slower rates of corporate earnings increase. While demographic decay is widely perceived as disinflationary, the wildcard would be if reduced production of goods due to a smaller producing population actually led to supply driven inflation, not disinflation. Global equity markets have risen for 40 years since 1974 on the back of the baby boomer generation's spending patterns. This book raises the question of whether global equity markets may well move sideways for a substantial period, like the markets from 1967-1982, due to demographic decay.
Lastly, in a world where debt and demographics produce a disinflationary response, where there is little monetary ammunition left to cut rates due to the fact that many nations already have cash rates at or near zero, and where fiscal spending is out of control, downgrades of debt and even defaults should become more common. Greece will not be an isolated incident by the time this crisis is over. Ferguson tracks the work of US scholars Reinhart & Rogoff in illustrating that defaults virtually always occur when commodity cycles burst, like currently, and where inflation makes a major low then starts to rise.
The conclusion of the book is that by end 2016 the peak in the global economic and equity market cycle should be apparent, with a washout period for financial assets and a recession phase for economies likely to extend into late 2017. Few financial assets will be spared.
Amazon US - http://amzn.to/1P9DTSj Amazon (Au) - http://bit.ly/1UftWmf Amazon UK shortlink - http://amzn.to/1UfubxA Apple - https://itunes.apple.com/us/book/id1075857670 Kobo - http://bit.ly/1S8DekR Barnes & Noble - http://bit.ly/1ZQCJBW
Press Contact: Craig Ferguson Antipodean Capital P/L 5 Sangsters Road, Mount Macedon, VIC 3441 +61422907465 http://www.antipodeancapital.com
Rate this! 1-5 starsFrom: Antipodean Capital Management P/L, Director of Strategy, Craig Ferguson.
Book Release: Debt, Defaults, Disinflation & Demographics: How to survive and prosper during the coming market meltdown of 2016-2017.
Our contention is that the 2 year window of 2016-2017 will see the next global recessionary phase, in which stocks will fall again by 50-60%, residential property by between 10-30%, commodities and most non USD FX rates will keep falling despite substantial falls already, and cash rates in those countries where they are not at zero already will fall towards zero. Persistent debt build ups in the developed and emerging world, combined with growth depressive demographics will foster a disinflationary cycle where sovereign government defaults again become the norm. In addition, the normal maturing of the US economic cycle, combined with a misguided set of central bank monetary policies, will contribute to the downturn.
This book is aimed at the person in the street. It seeks to explain what has happened to global economies and markets since the GFC, and to forewarn them of another episode in the making. It is designed to be easy to read, and combines many charts to display it's contentions. It's warnings around global asset markets and economies are particularly important.
As Antipodean Capital's Director of Strategy Craig Ferguson states, "There's a time to be bullish, and a time to be more circumspect and bearish, when investing. We sense circumspection will pay benefits between now and 2017-2018".
Ferguson argues that a combination of both natural cyclical forces, policy mistakes by global central bankers, and structural problems around the global debt build-up and demographic decay explain why the coming downturn will be particularly severe. Downgrades of sovereign government debt ratings like we have seen in recent years with Greece and the EU nations will again become the norm. Sovereign defaults will also increase in number during the next crisis. Ultimately the reason asset markets will fall especially hard is not just due to the increase in global debt to GDP ratio's, but also due to the fact that with fiscal deficits so high, and monetary policy globally at or near the zero bound, policy makers have no flexibility left in their fiscal and monetary instruments with which to respond and ameliorate the normal decline in financial asset prices that typically occurs in recessionary circumstances. This lack of flexibility will accentuate, not alleviate, the falls in financial assets.
Ferguson draws on an array of graphical work and research sources to highlight his contention. On the debt issue, he outlines how most of the world has debt to GDP ratio's above 90%, the point at which is starts to impact growth and consumption. The Emerging world is particularly vulnerable this time around. In addition, the current cycle has all the hallmarks of a very damaging cycle - rapid credit build up, high capital mobility, vulnerability to commodity cycles, and irrational behaviour of borrowers.
The demographic issue is particularly worrying. Ferguson outlines how falling fertility rates imply slowing population growth rates in coming decades, compared with those of the last 25 years. Rising dependants per worker imply a world of reduced production and consumption rates. Lower consumption and growth implies slower rates of corporate earnings increase. While demographic decay is widely perceived as disinflationary, the wildcard would be if reduced production of goods due to a smaller producing population actually led to supply driven inflation, not disinflation. Global equity markets have risen for 40 years since 1974 on the back of the baby boomer generation's spending patterns. This book raises the question of whether global equity markets may well move sideways for a substantial period, like the markets from 1967-1982, due to demographic decay.
Lastly, in a world where debt and demographics produce a disinflationary response, where there is little monetary ammunition left to cut rates due to the fact that many nations already have cash rates at or near zero, and where fiscal spending is out of control, downgrades of debt and even defaults should become more common. Greece will not be an isolated incident by the time this crisis is over. Ferguson tracks the work of US scholars Reinhart & Rogoff in illustrating that defaults virtually always occur when commodity cycles burst, like currently, and where inflation makes a major low then starts to rise.
The conclusion of the book is that by end 2016 the peak in the global economic and equity market cycle should be apparent, with a washout period for financial assets and a recession phase for economies likely to extend into late 2017. Few financial assets will be spared.
Amazon US - http://amzn.to/1P9DTSj Amazon (Au) - http://bit.ly/1UftWmf Amazon UK shortlink - http://amzn.to/1UfubxA Apple - https://itunes.apple.com/us/book/id1075857670 Kobo - http://bit.ly/1S8DekR Barnes & Noble - http://bit.ly/1ZQCJBW
Press Contact: Craig Ferguson Antipodean Capital P/L 5 Sangsters Road, Mount Macedon, VIC 3441 +61422907465 http://www.antipodeancapital.com
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