“The many challenges that lie ahead will likely lead to high volatility in the global cycle, in terms of growth and inflation. To weather such an uncertain period a more dynamic asset allocation framework is needed.”
Even before the current decade began, and before Covid and the Ukraine war, we believed the 2020s would bear similarities to the 1970s. What happened in the last years has obviously reinforced this conviction. These events begin with the sharp surge in inflation, combined with fledgling economic growth (stagflation) since 2021. They also extend to some of the certain and presumed causes of this stagflation:
- A war generating a surge in energy prices (Ukraine like Kippur) as a short-term trigger.
- The lagged effect of monetary and/or fiscal profligacy (post-Lehman QE and Covid policies like a series of pre-70 policies to address the financing of the Vietnam war, Lyndon Johnson’s Great Society or the post-war reconstruction) as a long term cause.
You can now read the full whitepaper at the link below
