{"id":37709,"date":"2018-09-13T05:47:39","date_gmt":"2018-09-13T10:47:39","guid":{"rendered":"http:\/\/olduvai.ca\/?p=37709"},"modified":"2018-09-13T05:47:39","modified_gmt":"2018-09-13T10:47:39","slug":"the-next-financial-crisis-is-right-on-schedule-2019","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=37709","title":{"rendered":"The Next Financial Crisis Is Right on Schedule (2019)"},"content":{"rendered":"

The Next Financial Crisis Is Right on Schedule (2019)<\/a><\/h3>\n

Neither small business nor the bottom 90% of households can afford this “best economy ever.” <\/i><\/p>\n

After 10 years of unprecedented goosing, some of the real economy is finally overheating:<\/b> costs are heating up, unemployment is at historic lows, small business optimism is high, and so on–all classic indicators that the top of this cycle is in.<\/p>\n

Financial assets have been goosed to record highs in the everything bubble.<\/i><\/b>Buy the dip<\/i> has worked in stocks, bonds and real estate–what’s not to like?<\/p>\n

Beneath the surface, the frantic goosing has planted seeds of financial crisis which have sprouted and are about to blossom with devastating effect.<\/b> There are two related systems-level concepts which illuminate the coming crisis: the S-Curve and non-linear effects.<\/p>\n

The S-Curve (illustrated below) is visible in both natural and human systems.<\/b>The boost phase of rapid growth\/adoption is followed by a linear phase of maturity in which growth\/adoption slows as the dynamic has reached into the far corners of the audience \/ market: everybody already caught the cold, bought Apple stock, etc.<\/p>\n

The linear stage of maturity is followed by a decline phase that’s non-linear.<\/b>Linear means 1 unit of input yields 1 unit of output. Non-linear means 1 unit of input yields 100 unit of output. In the first case, moving 1 unit of snow clears a modest path. In the second case, moving 1 unit of snow unleashes an avalanche.<\/p>\n

The previous two bubbles that topped\/popped in 2000-01 and 2008-09 both exhibited non-linear dynamics<\/b> that scared the bejabbers out of the central bank\/state authorities accustomed to linear systems.<\/p>\n

In a panic, former Fed chair Alan Greenspan pushed interest rates to historic lows to inflate another bubble, thus insuring the next bubble would manifest even greater non-linear devastation.<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n

ponents.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Next Financial Crisis Is Right on Schedule (2019) Neither small business nor the bottom 90% of households can afford this “best economy ever.” After 10 years of unprecedented goosing, some of the real economy is finally overheating: costs are heating up, unemployment is at historic lows, small business optimism is high, and so on–all […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[21635,124,127,303,3920,312,21636,587,3650],"class_list":["post-37709","post","type-post","status-publish","format-standard","hentry","category-economics","tag-21635","tag-central-banks","tag-charles-hugh-smith","tag-fed","tag-financial-bubble","tag-financial-crisis","tag-non-linear-dynamics","tag-of-two-minds","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/37709","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=37709"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/37709\/revisions"}],"predecessor-version":[{"id":37710,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/37709\/revisions\/37710"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=37709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=37709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=37709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}