Yen's Drop May Trigger Global Stock Selloff, Says SocGen Strategist
A strategist says the decline in the yen will force China to devalue
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The Japanese yen goes into free fall. China devalues its currency to keep exports cheap. A wave of profit-crushing deflation comes washing over the U.S. and Europe. Investors panic. That’s the view of perennial pessimist Albert Edwards. The London-based analyst and his team at Société Générale have been No. 1 for global strategy in Thomson Reuters Extel’s rankings every year since 2007. Among the calls that built his reputation were his warnings in the runup to the 2008 financial crisis that low interest rates could lead to a crash. “My role is to step back from the excessive enthusiasm that builds up in the market,” says Edwards, “and to just say, ‘This is wrong. This is going to go horribly wrong.’ ”