A serious recession would be terribly trying particularly in light of the geopolitical jockeying going on right now. Acute financial pressure, and it is already acute in some parts of the world, makes for instability. Leaders do stupid things when countries are in economic pain.
We haven’t recovered from the right cross which was the 2008 Crash. Our jaw has not healed. Firms weren’t allowed to fail. (Some firms.) Markets weren’t allowed to clear. As such debt was heaped on the crumbling ruins of an already debt ridden world economy.
The piper gets paid. One way or another he always does. Always.
In the long run we’re all dead? OK. But sometimes “the long run” is shorter than some would like.
“The world appears to be trapped in a circular reference death spiral,” Citi strategists led by Jonathan Stubbs said in a report on Thursday.
“Stronger U.S. dollar, weaker oil/commodity prices, weaker world trade/petrodollar liquidity, weaker EM (and global growth)… and repeat. Ad infinitum, this would lead to Oilmageddon, a ‘significant and synchronized’ global recession and a proper modern-day equity bear market.”