14 July 2010


When I talk about a recovery in the US markets I mean a real recovery. By this I mean a recovery from decades of debt, based on growth from the powerful companies of the US. That is what I mean may be happening.

There are signs of this. First of all there is a forced recovery from debt, as the debt markets collapsed and are still very fragile. What you are seeing now is maybe not a kind of commentary on a recovery it is a commentary on the fading of a debt economy.

It's just the economy is so hooked on debt...but as I said maybe the crisis can be seen as a good or necessary thing (or even a deterministic thing). Look at US companies they seem to be in a stronger position now than they have been in a long time.

All that has happened is debt inflation has been sucked out of some huge companies, which so far have handles this almost effortlessly (TARP given and returned is pretty effortless).

Why is this, well because they have this amazing ability to thrive in tough times. It is like there is a structural dynamo in the US economy which works with or without sales growth, to an extent.

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