{"id":64350,"date":"2022-12-03T13:16:03","date_gmt":"2022-12-03T18:16:03","guid":{"rendered":"https:\/\/olduvai.ca\/?p=64350"},"modified":"2022-12-03T13:16:03","modified_gmt":"2022-12-03T18:16:03","slug":"the-unavoidable-crash","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=64350","title":{"rendered":"The Unavoidable Crash"},"content":{"rendered":"<div class=\"section \">\n<div class=\"grid-container u-gc-full u-relative \">\n<figure class=\"cell image image--lead image--ratio-2-1    \"><picture class=\"fbg-image__element\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/webapi.project-syndicate.org\/library\/1ee0ace379d014b8677cc90f6ba62c53.2-1-medium.1.jpg\" alt=\"roubini171_Spencer PlattGetty Images_recession looming\" width=\"320\" height=\"160\" \/><\/picture><span class=\"image__copyright\">Spencer Platt\/Getty Images<\/span><\/figure>\n<\/div>\n<\/div>\n<div class=\"grid-container\">\n<div class=\"grid-x grid-margin-x fbg-image article__container\" data-sticky-target=\"interaction-article\" data-page-area=\"article-top\" data-sticky-offset=\"20%\" data-scroll-area-container=\"main\">\n<h3 class=\"small-12 large-offset-1 large-10 xlarge-offset-2 xlarge-8 cell article__title article__title--main u-mb-se\" dir=\"ltr\"><a href=\"https:\/\/www.project-syndicate.org\/commentary\/stagflationary-economic-financial-and-debt-crisis-by-nouriel-roubini-2022-12\">The Unavoidable Crash<\/a><\/h3>\n<div class=\"small-12 medium-10 medium-offset-1 large-8 large-offset-2 xlarge-6 xlarge-offset-3 cell u-mt-se\">\n<div class=\"article__abs u-mt-se\" dir=\"ltr\">\n<p>After years of ultra-loose fiscal, monetary, and credit policies and the onset of major negative supply shocks, stagflationary pressures are now putting the squeeze on a massive mountain of public- and private-sector debt. The mother of all economic crises looms, and there will be little that policymakers can do about it.<\/p>\n<\/div>\n<div class=\"article__body article__body--commentary  english\" dir=\"ltr\" data-page-area=\"article-body\">\n<p data-line-id=\"5b012998b42c42db878c3c336b55be14\">NEW YORK \u2013 The world economy is lurching toward an unprecedented confluence of economic, financial, and debt crises, following the explosion of deficits, borrowing, and leverage in recent decades.<button class=\"comment__caller icon-box icon-box--v \" aria-expanded=\"false\" aria-label=\"Paragraph comment\" aria-controls=\"login_register\" aria-haspopup=\"true\"><\/button><\/p>\n<aside class=\"inlay inlay--slide slide__container show-for-medium editorpick-container\" dir=\"ltr\" lang=\"en-us\">\n<article class=\"listing asize asize--c listing--contained\" data-url=\"musk-bought-twitter-to-get-cloud-capital-by-yanis-varoufakis-2022-11\" data-page-subarea=\"main-article-a2\"><\/article>\n<\/aside>\n<p data-line-id=\"8d02d284ad5848278529f0da229837e6\">In the private sector, the mountain of debt includes that of households (such as mortgages, credit cards, auto loans, student loans, personal loans), businesses and corporations (bank loans, bond debt, and private debt), and the financial sector (liabilities of bank and nonbank institutions). In the public sector, it includes central, provincial, and local government bonds and other formal liabilities, as well as implicit debts such as unfunded liabilities from pay-as-you-go pension schemes and health-care systems \u2013 all of which will continue to grow as societies age.<button class=\"comment__caller icon-box icon-box--v \" aria-expanded=\"false\" aria-label=\"Paragraph comment\" aria-controls=\"login_register\" aria-haspopup=\"true\"><\/button><\/p>\n<p data-line-id=\"d56f079009b344db9c0735d3cb007f8c\">Just looking at explicit debts, the figures are staggering. Globally,\u00a0<a href=\"https:\/\/www.iif.com\/\" target=\"_blank\" rel=\"noopener\">total private- and public-sector debt<\/a>\u00a0as a share of GDP rose from 200% in 1999 to 350% in 2021. The ratio is now 420% across advanced economies, and 330% in China. In the United States, it is 420%, which is higher than during the Great Depression and after World War II.<button class=\"comment__caller icon-box icon-box--v \" aria-expanded=\"false\" aria-label=\"Paragraph comment\" aria-controls=\"login_register\" aria-haspopup=\"true\"><\/button><\/p>\n<p data-line-id=\"11e7d207596c49588020fd7704238cc4\">Of course, debt can boost economic activity if borrowers invest in new capital (machinery, homes, public infrastructure) that yields returns higher than the cost of borrowing. But much borrowing goes simply to finance consumption spending above one\u2019s income on a persistent basis \u2013 and that is a recipe for bankruptcy..<\/p>\n<p>\u2026click on the above link to read the rest\u2026<\/p>\n<p data-line-id=\"e8a04de268914c70b60b601c5f3a3e0c\">\n<button class=\"comment__caller icon-box icon-box--v \" aria-expanded=\"false\" aria-label=\"Paragraph comment\" aria-controls=\"login_register\" aria-haspopup=\"true\"><\/button><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Spencer Platt\/Getty Images The Unavoidable Crash After years of ultra-loose fiscal, monetary, and credit policies and the onset of major negative supply shocks, stagflationary pressures are now putting the squeeze on a massive mountain of public- and private-sector debt. The mother of all economic crises looms, and there will be little that policymakers can do [&hellip;]<\/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":[124,239,6588,431,534,1917,3303],"class_list":["post-64350","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-economic-crisis","tag-financial-crash","tag-interest-rates","tag-monetary-policy","tag-nouriel-roubini","tag-stagflation"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/64350","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=64350"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/64350\/revisions"}],"predecessor-version":[{"id":64351,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/64350\/revisions\/64351"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=64350"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=64350"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=64350"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}