GRANTHAM: Investors Are Being Bullied Into Buying Risky Assets, Which Are Doomed To Crash
Feb. 6, 2013
Legendary investor Jeremy Grantham has just published his Q4 2012 letter to GMO clients.
Much of the letter is an extension of the extremely bearish message of his Q3 letter, in which he predicted GDP growth to decelerate from around 0.9 percent per year to 0.4 percent from 2030 to 2050.
Those who are invested in today’s markets, however, may find one part of his letter particularly frightening.
In a section sub-titled Engineered Low Interest Rates, Grantham discusses the impact of the Federal Reserve’s ultra-easy monetary policy. He warns that asset price inflation will work its way up from asset class to asset class until things fall back into place through “exciting crashes.”