The six scenarios defining the coming economic armageddon

Following the economic devastation of the GFC in 2008, economies around the world underwent a recovery and growth phase which was driven by internationally co-ordinated economic stimulus policies such as ultra-low interest rates, quantitative easing, tax cuts and increases in public spending aimed at stimulating economic activity and improving productivity, for example spending on infrastructure.

These policies encouraged greater economic activity resulting from private sector borrowing that funded both commercial investment as well as personal consumption. These policies were extraordinary in size and in some cases unprecedented and even experimental, such as with quantitative easing.

These policies have been responsible for either creating new structural imbalances or exacerbating existing imbalances to abnormally high and historic record levels in economies across the world.

In Australia’s situation, these structural imbalances have manifested themselves through record high asset prices (especially real estate), household debt (especially relative to disposable income), net foreign debt in excess of $1 trillion, record low interest rates and the lowest rates of household savings since December 2007.

In 2017 and 2018, economic growth driven by record levels of debt, rising business and consumer confidence, higher discretionary consumption and financial speculation in assets have created inflationary pressures (according to official measurements) in both advanced and developing economies.

Faced with historically chronic structural economic imbalances and building inflationary pressure, policy makers, specifically central banks, have the option to create two different economic environments in the coming period.

Continue here:


he can only find 6?

not looking hard enough..

imo the RE bubble in oz is our trigger..possibly followed by a big downturn in china..that would finish us..


~ by seeker401 on June 27, 2018.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: