H/T to Santagel’s Review for the find.
Watsa stated in his latest shareholder letter (released in February 2011):
“We wanted to protect our gains, and we worried about the unintended consequences of increasing our hedge to approximately 100%. Our view was twofold: our capital had benefited greatly from our too much debt in the system – worldwide! If the 2008/2009 recession was like any other recession that the U.S. has experienced in the past 50 years, we would not be hedging today. However, we worry, as we have mentioned to you many times in the past, that the North American economy may experience a time period like the U.S. in the 1930s and Japan since 1990, during which nominal GNP remains flat for 10 to 20 years with many bouts of deflation. We see fiscal deficits. We see the U.S. government embarking on a similar exercise (as it has no other option) and all this many problems in Europe as country after country reduces government spending and increases taxes to help reduce while businesses and individuals are deleveraging from their huge debts incurred prior to 2008.”
Below is a link to the interview-http://viewer.zmags.com/publication/d1f7adef#/d1f7adef/37