Here’s the link to James Montier’s post (in pdf form), which essentially rebuts a “this time is different” argument that Ben Inker made in GMO’s 2016 3rd quarter letter.
Both articles contain good points, and I agree with parts of each, although not really the conclusions of either.
IMHO, QE and the resulting balance sheet of the Fed is a major “this time is different” factor that neither of these articles addresses. It impacts the bond market in continuing purchases to maintain the balance sheet as assets mature, and it has impacted the markets for all other assets as dollars are pushed out into the investment world and stay there. Neither of these impacts are small or transitory in nature. And it isn’t just our Fed, but many central banks around the globe. I wonder what these guys think about that.