“It will be the creditor that tightens global liquidity. Not the debtor.”
I don’t agree with Russell Napier’s ultimate conclusion about S&P hitting 400, but this interview is full of gems:
(it’s part of a series: http://video.ft.com/v/940727417001/Long-View-A-gathering-storm)
The reason that I don’t agree with his conclusion is that I think emerging market credit expansion will be harder to control. I think credit expansion will be highly private, opaque, poorly regulated, and broadly accepted by the population. Expansion of credit is an expansion of the money supply. During which, emerging market consumption and inflation will be higher than expected. Corporate profit growth would likely rise faster in that scenario, so downside risk should be protected to some extent by strong corporate balance sheets.
Or of course it could go the other way. 🙂