Don't expect us to return to the "old" normal. Things will not be the same when the recovery comes, despite what the politicians and sections of the financial media tell you.

PIMCO managing director Bill Gross says everything has changed and in this note, he calls it the "new normal". And it's not pretty.

Gross writes: "If you are a child of the bull market, it's time to grow up and become a chastened adult; it's time to recognize that things have changed and that they will continue to change for the next - yes, the next 10 years and maybe even the next 20 years. We are heading into what we call the New Normal, which is a period of time in which economies grow very slowly as opposed to growing like weeds, the way children do; in which profits are relatively static; in which the government plays a significant role in terms of deficits and reregulation and control of the economy; in which the consumer stops shopping until he drops and begins, as they do in Japan (to be a little ghoulish), starts saving to the grave."

The world, he says, is being transformed by DDR - delevering, deglobalization, and reregulation.

That will mean several things. First, American-style capitalism where they make paper instead of things is no more. Secondly, global leadership has changed with China continuing to grow at a massive rate while the rest of the world is in recession. Also, the invisible hand of free enterprise is being replaced by the visible fist of government and the old normal housing models in the US which encouraged home ownership are no more.

So what can we expect? Obviously, we are in for years of low growth, more government intervention and the Asian and Asian connected economies driving whatever growth there is. The US dollar will continue to be weak. And government deficits will be here for years to come, which will put pressure on inflation.

And that's not even talking about the next wave of the recession which we could be headed into.