This article is from Thomas J. Barrack, Jr, Chairman of Colony Capital, June 8th 2011
It feels to us like a different strain of the “Stagflation” of the 1970s. Stagflation is an economic situation where the growth rate slowsdown, unemployment levels remain steadily highand inflation also stays high. We should all take alook back at the OPEC oil embargo of 1973, government spending of the 1970s, and the effect of a fall of consumer confidence that ensued. Maybe, we will not incur a “double dip” but caution should be foremost and complexity and risk should be correctly priced and calibrated.