Crispin Odey has warned developed markets will be hit with an 'inflation
tsunami'.
Odey, one of Europe's wealthiest and best-known hedge fund managers, says that a wave of inflation will come when emerging markets post current account deficits and workers' wages converge. Being invested in the West is the best place to be when this happens,
Odey told an audience at the Morning Star investment conference. 'We will not see any interest rate rise until wage inflation is well on the up. When
it does come through, it will take us out like a flood,' Odey explained.
If the scenario painted by Odey plays out, the standard of living in the
developed world will come down sharply. Odey believes this is not a
near-term threat, however it will come when salary gaps in the emerging
and developed worlds close and this will go on to shape future thinking
about the economy.
Quantitative easing should speed up the process of wage rises in emerging markets, which then translates into a. bullish factor for the West, which is becoming increasingly competitive despite emerging market resistance, Odey said
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