Early last year, Mark Yusko, pictured above, founder and CEO of
Morgan Creek Capital Management, predicted crude oil would approach $30 a
barrel and deflation would become the main economic headwind for the developed
world, rather than the inflation with which the market had been obsessing about.
The easing of
sanctions on Iran and Saudi Arabia's reluctance to cut production are among the
factors that will continue to crush energy prices.
"There's no chance we're going to get any
spike, upward movement in oil. It's not going to happen," Yusko said
during his annual "Bold Predictions" talk on Monday afternoon at the Inside ETFs conference in Hollywood, Florida.
Yusko also
projects a "messy bankruptcy" for at least one commodity company. He
pointed specifically to mining and commodities trading firm Glencore (London
Stock Exchange: GLEN-GB), which has seen its London-traded
shares fall nearly 70 percent in the last year amid sliding commodities prices
and debt concerns.
Yusko said a
recession is coming "as sure as the sun rises." He just can't decide
in which of the world's major economies a recession surprise will first arrive.
Either the
United States or Europe may fall into recession in 2016, he said, with his
pessimism about the U.S. economic outlook predicated on declining corporate
profits and a manufacturing sector contraction, which indicate a wider
slowdown.
Yusko also
echoed comments made at the Inside ETFs conference by influential bond investor
Jeffrey Gundlach of DoubleLine Capital, who criticized the Federal Reserve —
not for the first time — for raising interest rates in December.
"Maybe the Fed has actually lost
control," Yusko said.
The European Central Bank's negative
interest-rate policy elicited
this comment from the manager: "I'm not sure what that's a sign of, but
it's not good."
People are buying large quantities of Gold. We're not even a month into the new year and so far 2016 has already proven to be quite interesting. With the equities markets in decline, there has been renewed interest in gold and silver investing. Watch Mike Maloney's video below.
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