Been there, seen it

Finweek English Edition - - Economic Trends & Analysis - HOWARD PREECE howardp@fin­

ALAN STEEL, chair­man and owner of a Bri­tish as­set man­age­ment group, has dug out an ex­tremely in­ter­est­ing quo­ta­tion.

It’s a com­ment made by the Pek­ing Re­view.

The rel­e­vant sec­tion reads: “Through­out the United States, from New York to Los An­ge­les, from the auto city of Detroit to the steel city of Pitts­burg, the pic­ture is one of de­clin­ing pro­duc­tion, de­pressed mar­kets, sharply ris­ing un­em­ploy­ment, chaotic money mar­kets and slump­ing stock ex­changes.

“The coun­try is in the grip of a deep­en­ing eco­nomic cri­sis, the worst since the Sec­ond World War.”

Well, that’s how things are to­day, right? The Chi­nese, the widely as­sumed own­ers of the world’s fu­ture, are sim­ply spell­ing out noth­ing more than the bru­tal truth, yes?

That could in­deed all be the case, of course.

But the above ob­ser­va­tions of the Pek­ing Re­view do need some fur­ther study.

The cru­cial point is that they were made in the is­sue of 7 Fe­bru­ary 1975.

The Re­view’s com­ments of that time are ac­tu­ally a sharp re­minder now that, while the global econ­omy has taken its worst over­all bat­ter­ing in the past 12 months since 1945, there have been other pe­ri­ods of mas­sive cri­sis.

That fact, Steel ar­gues, is strongly sup­port­ive of in­vestors who are cur­rently tak­ing a cau­tiously op­ti­mistic view to­wards share mar­kets, par­tic­u­larly those who have re­cently taken the heav­i­est hits.

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