Summary

Helen’s assessment of the current crisis is that the economic recovery will take far longer than the market forecasts. The massive fiscal stimulus may have averted a depression but the primary factor delaying recovery will be fear preventing a proportion of the population from returning to normal behaviour ie. going out and spending. As she puts it, the velocity of people will be permanently impaired. Currently massive government intervention is distorting prices. This was illustrated perfectly (in the presentation) with a slide showing the DOW having its best week since 1938 whilst more than 16 million Americans lost their jobs. This disconnect between Wall Street and Main Street will close with asset prices going lower. Deflation will be prevalent for at least two years before there are any signs if inflation from a return of demand and money supply affects. Helen likes the yen the dollar and volatility here.

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