A global recession is on the horizon - please read OP for mod warning

...along with potentially triggering a significant financial sector crisis, tis a bit of a questionable approach isnt, particularly after one of the most serious global financial crisis humanity has ever experienced, it begs the question, do our central banks truly understand whats actually go on here, i.e. lets destroy the demand side, potentially increase unemployment and business failure, and potential trigger something far more serious, but shur if we get inflation down, so what, wtf!

...but again, what if they trigger some sort of financial crisis, due to a significant rise in defaults, what happens then, do we re-enter a 08 type scenario, there doesnt seem to be any acceptance of this possibility from central banks, just rock on with rises, be grand, again, just as long as inflation comes down, thats a bit of a dangerous game to be playing.....

That is what happens when you only have one objective and nothing else. The oil tanker analogy is a good one but maybe a better one is a famous cruise ship, at least that captain tried to avoid the iceburg when he saw it, he never went full steam ahead and drive straight at it did he ?

But raising rates does not reduce the cost of energy, that has come down on it's own and is the main reason inflation is not going up as much, everything else is still the same or higher, so has raising rates actually done anything apart from raising everyone's mortgages.

Maybe it takes time for these hikes to have the effect that is hoped for, who knows.

The war could end tomorrow, energy prices collapse but then anyone could say it was the rate hikes that worked and whole societies inured to rate hikes would say amen. I think people like the idea that they have policy makers who can just pull levers as it gives the impression that someone somewhere is in charge.

Are these hikes when nullified by government supports merely placebos for an inflation that would subside once Russian commodities were replaced?

I think it was the Saudi's ramping up oil production in the 1980s that was the nail in the coffin for the USSR, while the western narrative was it an ideal that had failed, when less than two decades later the capitalist banking system had their debts socialised.

I moved to Australia after after 08 and the conventional narrative the ozzies kept trotting out to explain how they avoided the financial crash was that they had a superior management culture, and anyone working in mining knew it had everything to do with China going on a massive structural spending spree that fueled a massive mining boom which kept the ozzie FIRE economy lit.

We went through a very pronounced asset price correction during the last crash but here we are back up to those levels... in the long run....

You suggesting tipping point? Or what you trying to say?

1. Make things sound scary
2. Hint something bad could happen
3. Be completely vague when asked what that bad thing will be
4. Point at 2008 when pushed

Have I got the formula right?

Anyone could dredge up posts from you years ago making exactly the same comments. It's a broken record of "something bad is about to happen" until inevitably, something bad happens.

You're right, you aren't the only one doing it.

"This is worrying!, the numbers have never been higher!" - people from the 00's, the 90's, the 80's, the 70's... the 19th century, the 18th century..

:)

I think some crisis event in the next 10 years will start a whole new way of thinking, banking, GDP, growth and society in general. Way to much division at the minute, populism taking off due to diminishing social values and increasing wealth divides.

Worth noting, history over the last 5 big 80- 100 years cycles are ended in some sort of a crisis event that spawns the new era. Of these events, nearly all of them involved a war against a foreign enemy that galvanised and mended a broken society.

Only one case, the most brutal crisis in terms of US history was american civil war, as they were fighting among themselves as opposed to a foreign enemy and it only divided society even more.

IMHO, I don't see a war but I see a climate crisis. Unfortunately I think this crisis will be comparable to the civil war crisis that did not result in a galvanised or together society, it will just divide us even more. People on one side will not want to give up freedoms, wealth etc for climate and the other side will be demanding degrowth, authoritarian controls and reduced consumption measures for climate reasons.

I cannot see any middle ground being achieved and hence serious civil unrest and divides in the Western world may be the outcome, whoever wins will get the rewrite the script for the next 100 year cycle.

That's my Saturday reflection, of course this is just an opinion.

More accurate graph than the original one you shared. Was going to comment on the first graph and say I could pick a different period and show the complete opposite.

This graph is telling me private debt grew by x2 and public debt by x2.5.

Go back to 1900’s and plot the same graph and you see a simple correlation between employment and private debt. When employment numbers are strong private debt rises…when employment numbers are week public debt slows or falls.

Another interesting graph to plot is the central bank rates to the Dow (or similar stock exchange index). What you see is that when rates remain flat the stock market index is flat. When interest rates drop Dow goes up along with increased employment and increased private debt. The 40 year long cycle of cutting rates went all the way to zero and then we had QE to keep the train on the tracks.

Remember that debt is also someone investment and all that has happened is that the wealth divide has grown…we have seen this many times in history and nearly always ends in revolution or war whether it is the let the poor eat cake or the Russian revolution, etc. Are we at this tipping point yet? Depends on who you ask and how badly the want the whole system to burn down whilst forgetting they are also part of the system and not fireproof.

China releases plan to lure more foreign investment as economy falters

https://archive.li/VZ362 china debt crisis

Here we go again.

Some inflation alarms are ringing again' for ECB interest rates

Money-markets currently price a 40% chance of a quarter point hike from the ECB in September