Chart of the Day: Subpar recoveries follow financial recessions
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January 7th, 2010 by Prieur du Plessis, Investment Postcards from Cape Town
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“Economic cycles associated with financial traumas such as banking crises or asset price collapses tend to have deeper downturns and weaker upturns. The current uptrend in US economic growth should be sustained, but the rebound will remain subdued compared to recent recoveries,” said BCA Research.
The chart below illustrates the typical recovery patterns following financial and non-financial recessions respectively. As they say, a picture paints a thousand words … Should the after-effects of the financial crisis indeed remain a serious headwind to economic growth, policy conditions should remain favorable for risky assets.
Source: BCA Research - Daily Insights, January 6, 2010.
Dr. Prieur du Plessis is an investment professional with 26 years' experience in investment research and portfolio management. More than 1,200 of his articles on investment-related topics have been published in various regular newspaper, journal and Internet columns, including his blog, Investment Postcards from Cape Town. He has also published a book, Financial Basics: Investment. Prieur is Chairman and principal shareholder of South African-based Plexus Asset Management, which he founded in 1995. The group conducts investment management, investment consulting, private equity and real estate activities in South Africa and a number of foreign countries. He also serves as Honorary Consul of Slovenia for South Africa, actively developing economic, cultural and scientific relations between Slovenia and South Africa. Prieur is 54 years old and live with his wife, television producer and presenter Isabel Verwey, and two children in Cape Town, South Africa. His leisure activities include long-distance running, traveling, reading, motor-cycling and scripophily. Read more from the author/contributor here.
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Tags: Abyss, Asset Price, Bull Markets, Catalysts, Commodities, Declining Dollar, Fiat Currencies, Gold, Gold Bullion, Gold Bulls, Gold Price, Gold Reserves, Government Bonds, Greenback, Headway, Human History, Inflation Expectations, John Mauldin, Paper Currencies, Plexus Asset Management, Reflation, Six NationsPosted in Gold |
