As always, I’m not certain of anything, I am putting these thoughts out for your consideration to take or leave as you like, and I hope that you find them helpful. While central banks can more easily and flexibly print money and give it to debtors to alleviate the debt problems and give spenders the ability to spend in a fiat monetary system, it should be noted that their doing so doesn’t eliminate the rises in debt assets and debt liabilities that become excessive and produce debt crises. All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer. I wrote the book in 2018 at the suggestion of former Treasury Secretaries Henry Paulson and Timothy Geithner and Fed Chair Ben Bernanke because we went through the 2008 financial crisis together in our different roles and they thought that on the 10th anniversary of the crisis it was important to share the lessons of that crisis in this book and other books.

The Other Four Big Forces Affect How This Debt Cycle Transpires Just as This Debt Cycle Affects How the Other Four Forces (and All of the 18 Previously Mentioned Forces) Transpire Together I find that whenever I start talking about cycles, particularly big, long-term cycles, people’s eyebrows go up; the reactions I elicit are similar to those I’d expect if I were talking about astrology. For that reason, I want to emphasize that I am talking about nothing more than logically-driven series of events that recur in patterns. In a market-based economy, expansions and contractions in credit drive economic cycles, which occur for perfectly logical reasons. Though the patterns are similar, the sequences are neither pre-destined to repeat in exactly the same ways nor to take exactly the same amount of time.In this big-picture, simplified model of the money-credit-debt-markets-economic machine, the following describes the major parts and the major players and how they operate together to make the machine work.

The money and debt devaluations of 1971 and the newly gained free ability of central banks to create money, credit, and debt to fight economic stagnation led to the massive stagflation of the 1970s. What hasn’t changed through these shifts in monetary systems over the millennia—and hasn’t been eliminated as a problem—is the creation of unsustainably big debt liabilities and assets relative to the amounts of money, goods, services, and investment assets in existence, which can lead to a run for the money and the goods and services that have intrinsic value.

How These Mechanics Have Played Out From 1945 Until Now

Compendium of 48 Cases (which is a compendium of charts and brief descriptions of the worst debt crises of the last 100 years) Since 2020 we have experienced the big easing part and most of the big tightening part of the short-term debt cycle. Any such offering will be made pursuant to a definitive offering memorandum. This material does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual investors which are necessary considerations before making any investment decision. The only important difference between today’s money (which is now fiat money) and prior monies (which were not fiat monies, such as that in the 1945-71 period) is the link to hard currency isn’t there. That means that central banks can now more freely create money and credit than in the past. As had happened repeatedly over thousands of years, the much larger financial claims on the money than the actual money in the bank led to a run on the central bank to get the money (i.e., the gold), which led the US in 1971 to default on its promises to allow holders of debt assets to turn them in for the money (gold).