Raoul Pal
Everyday, we hear some pretty grim predictions about the markets and the economy. But this is one of the more comprehensive and most gloomy outlooks we’ve ever seen.
Raoul Pal expects a series of sovereign defaults, the “biggest banking crisis in world history”, and asserts that we don’t have many options to stop it.
Pal previously co-managed the GLG Global Macro Fund. He is also a Goldman Sachs alum. He currently writes for The Global Macro Investor, a research publication for large and institutional investors.
See Presentation here
See the Pal’s presentation HERE
“The world has no engine of growth with most of the G-20 countries approaching stall speed at the same time. Now, what is that? G-20, that’s the 20 biggest countries in the world. Approaching stall speed. We have no engine of growth. Ask yourself this question: What is the engine of growth in the United States? Currently it is being set up that the engine of growth is the stimulus package, is the United States government. Is that real growth? I contend - and you know the answer - no,” Glenn explained.
“The western world is about to enter a second recession in an ongoing depression. For the first time since the 1930′s, we’re entering a recession. Before industrial production, durable goods orders, employment, and private sector GDP have made back their previous highs. Hear that again. For the first time since the 1930′s before we’ve made if back up on our feet. Usually we have a recession, it starts to grow again, and then we come back down. This is – this is a new trend.”
“Fact: This will to be the lowest cyclical peak in GDP growth in G-7 history. These are the weakest ever foundations on which to enter a recession.”
“The problem is down to one thing: Debt.”
“This is significant. The 10 largest debtor nations on earth have total debts of over 300% of world GDP. History tells us that when sovereign defaults occur, what does that mean? Sovereign defaults? Sovereign default, if a sovereign default occurs, that means Greece goes out of business, Spain goes out of business, Portugal goes out of business. The Euro is a bubble. It will crash,” Glenn said.
“History tells us when sovereign defaults occur, they come in a series of defaults. We need to understand history in order to grasp the present. The domino effect. In history when you have a default, one falls into the other and the other and the other. So, he says, what is coming? EU sovereign debt defaults. UK sovereign default. Japan sovereign default. South Korea, sovereign default. China, sovereign default.”
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