• Stuart Fowler

Capital cheap or dear?

Confronting an unavoidably long period of deleveraging of economies, it is difficult to avoid the logical conclusion that capital should become expensive. Recessionary forces may hint at underuse of available savings and falling prices may create an illusion of cheap capital, particularly as credit spreads narrow. But I would warn against forgetting the essential message of the new era. Capital is going to be rationed, hard to access and, in real terms, very expensive.

Modern owners of financial assets may well think of themselves as the democratised affluent, which is all they mostly are, but might do better to behave as if they were in an 18th or 19th century minority of capital providers, who seemed generally better able to sense the value of what they had and others wanted. good to see it apply these same skills to debt education, as damage prevention.



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