Loading ...What happens when you run an economy on an economics that doesn’t consider debt?
Policymakers pat themselves on the back for their success in the debt fuelled boom phase before everything blows up in their faces.
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The 1920s roared with debt based consumption and speculation until it all tipped over into the debt deflation of the Great Depression. No one realised the problems that were building up in the economy as they used an economics that doesn’t look at private debt, neoclassical economics.
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Yes, it’s the economics of globalisation and it’s the same as it’s always been.
1929 and 2008 look so similar because they are; it’s the same economics and thinking.
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China has made the same mistakes as everyone else, but saw their Minsky Moment coming before they hit it.
At 25.30 mins you can see the super imposed private debt-to-GDP ratios.
We’ve crashed the global economy with neoclassical economics.
As bad as it’s always been.