Albert Edwards

Albert Edwards is well known as the originator of The Ice Age thesis some 15 years ago. He identified the wholly unsustainable nature of western central banks excessive lose monetary policies and how it was, in effect creating a Ponzi Credit scheme. In contrast to most economists, who by the time of 2006 firmly believed that Central Bankers had tamed the cycle and believed in The Great Moderation, Albert believed that previous ‘missed’ recessions would emerge in one large postponed event. He drew heavily on the under-utilized work on sector imbalances of the recently deceased Cambridge Economist Wynne Godley.

Albert is known as an extreme equity bear and has been underweight equities as an asset class in his model portfolio since the end of 1996 in favour of long government bonds. He foresaw an Ice Age where equities would replicate the experience of Japan though the 1990’s and de-rate both in absolute terms and relative to government bonds. He had a target of US 10 year yields falling below 2% for over a decade.

Albert current believes the US equity market has far further to decline on the basis of long term cyclically adjusted PE ratios such as the Shiller PE ratio and also Tobin’s Q ratio. He thinks the biggest deflationary risk is a China hard landing. Like in 2007, there is massive complacence and overconfidence that the “authorities” can achieve a soft-landing.

Albert currently works at French investment bank Societe Generale as a Global Strategist after previously doing the same at Dresdner Kleinwort for 20 years. He has previously worked at Bank America Investment Management and The Bank of England.

Deflation Research & Commentary by Staff

  • Deflating News for This NFL Team

    In the U.S., the National Football League has seen better days. Besides the controversy over players kneeling during the national anthem, television viewership has been trending lower. About a year ago, EWI’s November 2016 Financial Forecast called attention to the waning interest in the NFL: Ratings for the once bullet-proof NFL are even down for […]

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  • Why This Economist Sees Deflation as a Big Threat

    U.S. debt levels have skyrocketed since the Great Recession, and in EWI’s view, this is a harbinger of deflation. A historical review shows that major U.S. deflationary periods had one thing in common: an unsustainable buildup of credit. A classic Elliott Wave Theorist says: Easy credit has in turn created an unsustainable debt load throughout […]

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  • Will These Two Factors Ensure Japan’s Escape from Deflation?

    Many observers of global economies believe that governments have a big influence over those economies. Relatedly, observers also believe that central bank policies have a lot to do with a nation’s inflation rate. But, in his book, Conquer the Crash (2002), Robert Prechter called this the “potent directors” fallacy: It is nearly impossible to find […]

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