Last quarter, we used the metaphor of a highway for what we thought might happen to the economy and the financial markets. We believed that “this time is different” and that despite large doses of monetary liquidity, a la Greenspan, the global economy would be stuck in slow growth for a considerable period. A debt deleveraging is a drawn out process, absent very high levels of inflation. The reduction of debt and offsetting decline in spending by individuals and governments would make for a very grudging recovery which would put the economy squarely in the slow lane.
Read the full newsletter at the link below.Canso October 2011 Market Observer