Grantham Predicts Prolonged US Recession Stretching Into Next Year

Jeremy Grantham, co-founder of the Boston-based investment firm Grantham Mayo Van Otterloo (GMO), predicts a US recession "running perhaps deep into next year." Grantham says we have entered a period of "moderately higher inflation." Grantham speaks in an interview taped on August 17th for an upcoming episode of "Bloomberg Wealth with David Rubenstein." -------- Follow Bloomberg for business news & analysis, up-to-the-minute market data, features, profiles and more: Connect with us on... Twitter: Facebook: Instagram: ...(read more)

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Grantham Sees a US Recession Running Deep Into Next Year Investor Jeremy Grantham has recently made waves by predicting a prolonged recession in the United States that will carry on deep into next year. His forecast comes at a time when the economy is grappling with the effects of the ongoing COVID-19 pandemic and the subsequent lockdown measures imposed by various governments. Grantham, co-founder of GMO LLC, an investment management firm, has a reputation for accurately predicting major market shifts in the past. His notable forecasts include the Japanese asset bubble in the late 1980s and the global financial crisis in 2008. With such a track record, his warning of an extended period of economic decline warrants attention. The COVID-19 pandemic has disrupted the normal functioning of various industries, leading to widespread job losses, business closures, and a decline in consumer spending. The initial hopes of a V-shaped recovery have fizzled out as the virus persists, necessitating continuous social distancing measures and impeding the reopening of economies. While some experts were optimistic about a sharp rebound as soon as the virus was under control, Grantham takes a more cautious approach. He believes that the damage caused by the pandemic is far from over and that the recovery will take much longer than expected. Grantham points to the fact that recessions caused by financial bubbles tend to last longer and have slower recoveries. Considering the previous length and severity of the US stock market bubble, he claims this recession will follow suit. One of the factors that Grantham highlights as a potential roadblock to recovery is the high level of corporate debt. Many businesses were heavily reliant on borrowing even before the crisis struck, and now the situation has worsened. Disrupted cash flows and declining revenues have raised concerns about the ability of companies to service their debt obligations. With the possibility of defaults and bankruptcies on the horizon, the impact on the overall economy could be significant and long-lasting. Additionally, Grantham points to the high unemployment rate as another reason for a prolonged recession. Millions of Americans have lost their jobs, leading to decreased spending power, which can further suppress economic growth. The combination of high unemployment and reduced consumer confidence could ultimately result in a downward spiral of economic activity. Grantham’s warning may sound bleak, but it serves as a reminder that the road to recovery will be challenging and filled with uncertainty. Governments and policymakers must adopt a cautious approach and be prepared for a prolonged period of economic decline. Swift and targeted fiscal stimulus measures will be crucial in supporting struggling businesses and workers who have lost their livelihoods. While Grantham's predictions should not be taken as a certainty, they do offer insights into the potential challenges ahead. It is essential for individuals and businesses alike to be prepared for the possibility of a prolonged recession and to plan and adapt accordingly. As the world continues to battle the COVID-19 pandemic, the economic implications will be felt for years to come. Grantham's forecast serves as a stark reminder that the road to recovery is long, winding, and fraught with obstacles. https://inflationprotection.org/grantham-predicts-prolonged-us-recession-stretching-into-next-year/?feed_id=137761&_unique_id=6509e7a06967d #Inflation #Retirement #GoldIRA #Wealth #Investing #davidrubenstein #debt #fed #GranthamMayoVanOtterlooCoLLCGMO #investing #investmentbanking #jeremygrantham #Portfolio #recession #stockmarketnews #RecessionNews #davidrubenstein #debt #fed #GranthamMayoVanOtterlooCoLLCGMO #investing #investmentbanking #jeremygrantham #Portfolio #recession #stockmarketnews