http://www.zerohedge.com/news/2022-08-08/zoltan-pozsar-deep-recession-lesser-two-evils-now
Economic War is Inflationary. We are at Economic War
The most important take-away from what Zoltan said in his latest to our eyes after a long slow read-through is that he believes high rates are here to stay. That is the bottom line of bottom lines if you will. The last paragraph in his 4,000 word post we believe is intended to inform the reader of major long term changes that are coming: (emphasis ours)
If the East holds the key to the supply side, and economic war means that the supply side is held back, the West will have to develop its own supply of things such that “L” becomes “L/”. And much like the current hiking cycle is not a cycle but a tightening campaign, that recovery won’t be a recovery driven by rate cuts but by fiscally funded industrial policy…
Pozsar is consistent with previous writings here in that he continues to see the mercantilist situation currently unfolding. He sees the eventual necessity for a Bretton Woods 3 type of monetary agreement to help heal East/West trade. He foresaw the split in good physical collateral and the supply chain collapse as instigating a rebalancing of the spot world versus the financial world. He also sees the necessity for long term rates to go up while asset prices decrease.
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