Analyst: Buy Barbed Wire and Guns
Monday, June 7, 2010
Anthony Fry, senior managing director at Evercore Partners, said on CNBC this morning, “The current problems will be with us for 5 years or more and uncertainty is very high.”
“Look at the current situation. You have Greece, now you have Hungary and huge issues surrounding Spain and Portugal,” he said.
“You can have lower rates and deflation, higher rates and higher inflation or the nightmare scenario of higher rates and deflating asset prices,” he said.
“If the nightmare scenario plays out as I suspect it may then the debt situation gets worse. There is currently no exit strategy and the reaction to the crisis of policy makers remains a big worry.”
“I don’t want to scare anyone but I am considering investing in barbed wire and guns, things are not looking good and rates are heading higher,” he said.
Higher rates and deflating assets prices come about because of stagflation, a problem faced in the U.S, during the late 1970’s. Any replay of such a scenario would likely be more extreme, given the current sovereign debt problems.
Evercore has handled over $1 trillion of merger, acquisition, recapitalization and restructuring transactions and is headed by Roger Altman, a former Deputy Secretary of the Treasury.