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Second chances

It is hardly as if I have been deluged with letters, emails and stalkers begging me to put them out of their misery but I probably should not have ended last week’s column on a cliff-hanger – even if it was an investment cliffhanger and therefore perhaps not quite in the same league as The Empire Strikes Back or, more literally, The Italian Job.

Nevertheless, I do feel that amends should be made. So, briefly to recap, I recently chaired the autumn IQ roadshow and on the final leg in the final panel session to the final manager I put my all-purpose final question as what most concerned them about the investment outlook for 2012 and what single event might benefit their portfolio.

And on the former point, Artemis’s William Littlewood – for it was he – replied: “The biggest worry to me would be what has happened in Greece, Ireland and Portugal spreading over to one of the other big countries, which I think is going to happen at some stage in the next five or 10 years – whether it happ-ens next year, I don’t know.”

As I mentioned last week, the event timings meant I could now either release the 100-plus delegates so they might head upstairs for their wine and canapés or start their weekend half an hour early or probe this unexpectedly dramatic response in greater depth. Somewhat flustered, I merely wound up proceedings and went home feeling I could have played it better.

However, this column, splendid vehicle that it is, has afforded me a second chance and in a foolhardy and probably one-off attempt to experience what it must be like to be a proper journalist, I this week asked the good, good people of Artemis for further and better particulars and they obliged.

“What worries me most about the medium and longer-term outlook is sovereign debt,” explains Littlewood. “Government finances in the mature world are in a parlous state, with high ratios of debt to GDP, and these will be aggravated by deteriorating demographics.

“Greece and Ireland may be manageable. Spain won’t be. Eventually, I expect most of Europe, the UK, the US and Japan to default or inflate As long as a country can print its own currency, default is not a realistic proposition, so these countries will have to whittle their debts away via inflation. Quantitative easing is the chosen weapon.

“But quantitative easing is a continuation of the disastrous policy of the Greenspan era, whereby investors expect to be bailed out if there are problems. Intuitively, the idea that we can rack up enormous debts, issue government bonds and then buy them all back with newly created ’funny money’ is not a policy one would expect to be successful – otherwise it would have worked before.”

So there you have it – straight from the horse’s mouth and, honour, I trust you will agree, duly satisfied. It has, admittedly, been satisfied some 200 words ahead of schedule so forgive me for turning instead to something that has been making me smile all week.

Last Friday saw the culmination of Book Week at my daughter’s nursery and a fancy dress parade where they had to come dressed as a character from their favourite book. With a maturity some way beyond her two years and displaying great loyalty to her mother and father, this is, of course, Investing in emerging markets – the Bric economies and beyond, and the only question was therefore whether she should go dressed as Hugh Young or Angus Tulloch.

OK, in the end, she went to nursery dressed as the Hungry Caterpillar After It Has Turned Into A Butterfly. Well, technically, she went to nursery dressed in bright green clothes, screaming her head off while her mother carried her wings and deely-boppers but a besuited toddler was a great mental image and, the point is, I resisted the temptation.

Though obviously not the temptation to use my final column of the year to commend a certain book to you as the ideal Christmas present for all your family, friends and colleagues – and, no, I am not talking about The Hungry Caterpillar. Have a splendid festive period and I look forward to further literary discussions in 2011.

Julian Marr is editorial director of and


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