Hedge Fund Bridgewater See Another Lean 11-16 Years in Western World

Hedge Fund Bridgewater See Another Lean 11-16 Years in Western World

Acclaimed hedge fund Bridgewater Associates is a little down on the Western world these days, describing the US and Europe as “zombies” that will remain as such until they work through their current massive pile of debt:

“What you have is a picture of broken economic systems that are operating on life support,” Mr. Prince says (co-chief investment officer at Bridgewater). “We’re in a secular deleveraging that will probably take 15 to 20 years to work through and we’re just four years in.”

In Europe, “the debt crisis is [a] long ways from over,” he says. The economic and financial morass will mean interest rates in the U.S. and Europe will essentially be locked at zero for years.

Source: Bridgewater Take Gloomy View of 2012 – WSJ.com

The article goes on to state that Bridgewater is positioned for higher gold prices, stronger Asian emerging market currencies, and lower-yields on high quality government bonds.

Given the ominous demographic challenges facing the West (see our interview with expert Harry Dent), you almost wonder if Bridgewater’s outlook is too positive!  I am hard pressed to see any “white knight” that could return the aging, socialist Western world to a state of high growth anytime soon.

I am also sympathetic to the view that sustained growth is an anomaly – and that the gangbuster growth the human race experienced in the 19th and 20th centuries was largely a function of cheap energy.  But that’s a subject for another column (or 5!)