You are here: Home » Markets » Goldman says fund managers expect deflation

Goldman says fund managers expect deflation

Goldman Sachs London conducted a poll of FX/Macro fund managers today that had interesting results.  The poll demonstrated that fund managers are expecting deflation more than inflation and that they expect the U.S. or Asia to escape the downturn first (and certainly not Europe or the UK).  I imagine that funds are positioned accordingly in currencies, stocks, and bonds.

Here are the poll results:

• 83% of participants believe that the biggest global threat at present is ‘deflation’ vs 17% believing this will be ‘inflation.’
• 82% believe we will se a US style 1930s Depression vs a German style 1920s period of hyperinflation.
• 47% believe the US will recover first from the current crisis, 42% believe it will be China/Brazil… Only 7% believe this will be the UK and only 4% believe it will be Europe!
• 73% believe the US will recover before the Eurozone (only 6% believe that Europe will recover before the US while the rest believe they will both recover at the same time).
• 55% believe a country will leave the Eurozone 10 years from now or later – only 10% believe that this will happen within the next year.
• 44% indicate that they are avoiding all EM investments for now – 20% would invest in Latam, 27% in non-Japan Asia and the rest in EMEA.

About Edward Harrison

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages, a skill he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

• View all posts by Edward Harrison →
• Blog
• Twitter
• Facebook
• Google+

• Inflation or deflation? 30 Jun 2008
• Macro Maven: Expect a long difficult recession 13 Dec 2008
• Corporate defaults mean more hedge fund blow-ups 22 Jul 2008
• The inflation-deflation debate 21 Jul 2008
• U.S. CPI: Lowest since 1954 – deflation here we come 16 Jan 2009