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Hugh Hendry's 2010 comment, always full of non-linear thoughts; here are some excerpts:
"Monetary and fiscal accommodation have been overwhelmed by the 10% contraction(muchof it involuntary and taking the form of default) in the private sector’s debt-to-GDP ratio from its peak of 3x in early 2009."
(...)
"My greatest complaint however is that the Fed is producing a plutocracy by demonstrating that they are willing to go to alllengths to prevent a market inpired liquidation of the economy’s bad debts. This is what happened in Weimar Germany."
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"I have always held the view that Europe will have its Asian Crisis moment when the popular mood in Germany rejects any further bail-outs and concludes that it is everyone for themselves."
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"And so I end where I began. Should a grotesque series of debilitating financial events, from disarray in Europe to a growth shock in Asia, set the yen racing below 70 to the dollar, it could establish the pretext for a truly gigantic monetary intervention. It is conceivable that the Bank of Japan would be nationalised and with the politicians galvanised by public fears and recriminations an era of hyperinlation would surely beckon. Inflation would indeed be a monetary phenomenon."
(...)
"The Chinese have been the global economy’s magic tooth fairy these last two years, absolving us from our economic sins and making the fallout from the crisis of 2008 more manageable than bears like myself thought possible. But it is just about possible that their benevolence is changing as they seek to rein in their own domestic price inflation."
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