Hope Is The Biggest Enemy: Albert Edwards

Societe Generale strategist and resident permabear, Albert Edwards is revisiting his Ice Age thesis this month as US implied inflation expectations fell lower, following what he sees as a multi-cycle step down into outright deflation. “With each cyclical upturn, equity investors have assumed with child-like innocence, that central banks have somehow ‘fixed’ the problem and we were back in a self-sustaining recovery,” Edwards writes. “Those hopes would only be crushed as the next cyclical downturn took inflation, bond yields and equity valuations to new destructive lows. In the Ice Age, hope is the biggest enemy.” Investors losing confidence that inflation will…