Goldman Sachs (GS) is essentially predicting a lost decade for most of the developed world.
Output gap will not be filled till almost 2016-2018 for most of the developed economies. Unemployment must remain high till this time. Chimes in nicely with PIMCO's Billl Gross who feels that unemployment will remain high on a structural basis (in what El-Erian calls a deleveraged, deglobalized and reregulated world). I have a hard time believing the inflation theme given such data points. At the very least, inflation is 3-4 years away. Mexico looks like it will suffer because of it’s proximity to the US and the swine-flu. Indonesia and Australia are interesting non-mainstream ideas. It clearly helps to be a commodity exporter. The commodity super cycle is alive and well. Clearly, China and India look like the places to be. Sidenote: The domestic demand growth story of India is possibly the best secular growth story I can think of over the next decade, as opposed to depending on the “change” from an export dependent economy to a domestic demand driven economy in the case of China. Domestic consumption is already 60%+ of the economy in the case of India. Probably great news for the Indian Rupee as well. I’m not convinced as to why UK should recover before US. The UK real estate market has been described by Jeremy Grantham as the only remaining asset class bubble, and I would generally expect Europe to lag US in recovery. The chart below illustrates that the real estate markets in Europe have been lagging those in the US. Read more here: http://financialjoyride.blogspot.com/2009/06/goldman-sachs-predicts-lost-decade.html --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
