Tags: Bridgewater | Zombie | Nations

Bridgewater Fund: Decade of Slow Growth, High Unemployment for Big 'Zombie' Nations

Wednesday, 04 Jan 2012 08:17 AM

Bridgewater Associates, the world's biggest hedge fund, expects that 2012 will carry no pleasant economic surprises.

In fact, the fund is preparing for at least a decade of slow growth and high unemployment for the big developed economies, which fund co-CIO Robert Prince describes as "zombies" and says will remain that way until they work through their mountains of debt.

"What you have is a picture of broken economic systems that are operating on life support," Prince told the Wall Street Journal. "We're in a secular deleveraging that will probably take 15 to 20 years to work through and we're just four years in."
_________________________________________________________

URGENT: Wall Street Whistleblower Warns of Meltdown - See His Uncensored Interview

_________________________________________________________

The problem for the U.S, Prince says, is that it is on the wrong side of a long-term debt cycle.

"We were in a leveraging-up period for 60 years, from the early 1950s to 2008," Prince says, creating a debt bubble that was self-reinforcing on the way up, and "when it tipped over, it set about a self-reinforcing process on the way down."

Prince observes that the level of leverage, as measured by comparing household income to net worth, is still higher than it was before 2008. He expects the Federal Reserve will do more quantitative easing with sporadic bond purchases.

"The most likely environment is moderate growth with wiggles up and down and this is one of those wiggles up," he says.

Nor does Prince see a brighter immediate future for Europe, where the debt crisis is a "long ways from over,” which means that interest rates in the U.S. and Europe will essentially be locked at zero for years.

"You've got insolvent banks supporting insolvent sovereigns and insolvent sovereigns supporting insolvent banks," Prince says.

Bloomberg reports that manufacturing from the U.K. to India showed improvement in December, suggesting production is weathering strains from Europe’s sovereign debt crisis.

© 2015 Moneynews. All rights reserved.

Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Couple Lose Court Case in Abortion Based on Lab Error

Thursday, 29 Jan 2015 10:49 AM

A New England couple who aborted a four-month-old fetus in 2009 after early genetic tests suggested disorders in the fet . . .

Study: Chances of Dying in a Car Crash Plunged Over 3 Years

Thursday, 29 Jan 2015 10:08 AM

Safety researchers say the chances of dying in a crash in a late-model car or light truck fell by more than a third over . . .

Medical Supercomputer Isn't a Pacemaker, IBM Tells Congress

Thursday, 29 Jan 2015 08:45 AM

Watson, an artificial intelligence technology that IBM wants to sell to help doctors diagnose diseases, will largely esc . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved