A couple more tidbits from Jeremy Grantham: the long-time bear who recently turned bullish tells USA Today that the economy could be in store for a lengthy period of trouble. “Grantham thinks that ‘we could have something reminiscent, in some respects, to the Japanese situation’ that began in the early 1990s and continued well into this decade — a long, low-grade deflationary recession’,” the newspaper reports. “U.S. investors in stocks and bonds may have to write off $20 trillion,” according to Grantham. “When you write off that much of your net worth, it changes your world.”

But while he foresees a tough economic picture, Grantham doesn’t see the same troubles for the stock market. He tells Kiplinger’s this month that U.S. stocks should return an annualized 6% plus inflation over the next seven years. “The U.S. is decently cheap,” he said. “Super-high-quality U.S. blue chips are now very cheap.” What’s more, Grantham projects foreign stocks will post even higher returns, Kiplinger’s Andrew Tanzer reports.