Grantham: Expect Years Of Economic Drag

Tuesday, May 26, 2009 8:07 AM

By: Julie Crawshaw

Though he expects the economy will look better for a couple of quarters, GMO head Jeremy Grantham says that the long-term imbalance between overproducers like China and overspenders like the Unites States will be a multiyear drag on growth.

"We're not rich, and we're undersaved and underpensioned," Grantham told Smart Money.

"Those will be a real brake on economic growth."

Still, Grantham says, investors who move swiftly in this market can make money.

“The people who invest in energy alternatives will make more,â€