From the AFR:
Fidelity asset allocation director Trevor Greetham is betting on a repeat of the 1990s disinflationary global economic recovery, predicting tougher times for commodity-dependent Australia.
Mr Greetham said the combination of a slowdown in China, similar to Japan 20 years ago, normalisation of ultra loose monetary policy in the United States, emerging market stress and likely falling commodity prices had striking parallels to the world economic cycle two decades ago.
“I see that same situation, where China is going ex-growth, excess capacity commodity production built up during the boom and emerging market stress with more scary episodes to come”…saying he was “underweight commodities quite substantially”.
“I do think there will be a more difficult period for Australia as money flows back into America and commodity prices weaken,” Mr Greetham said.
“The economy’s commodity sensitivity and close ties to China are going to be headwinds.”
Cheetham is long US and Japanese equities and so long as the Fed is on his team he is right to be.
