GRI is pleased to present an exciting collaboration with innovative news provider OZY. We’re kicking things off with a series of five articles by Senior Analyst Jeffrey Moore, looking at Black Swan events. The final installment forecasts the sources of the next global recession.
In this series, we have outlined black swan events that, while extremely unlikely, would lead to extremely negative global economic consequences — a disintegrating European Union, massive interest rate increases in response to runaway inflation, a flash crash that reveals the perils of financial leverage and China’s disruption of the financial world order by pricing commodities in its own currency and asserting economic hegemony.
It has been roughly 10 years since the Great Recession, which in the U.S. seemingly came out of left field after years of strong growth and ascending markets. The preceding bullish cycle was driven by easy money that fed into an effervescent real estate market that eventually reversed and brought down the financial world with it.
In 2018, after years of slow growth and recovery aided by unprecedented easy-money policies, economies and markets around the world are riding high — very high. U.S. markets have notched repeated all-time records, corporate earnings growth is back in a big way and economic policy is marked by tax cuts and regulatory streamlining. This flourish comes after another record was set last year: the run off the lows of March 2009 is now the second-longest bull market in U.S. history, and talk of an inevitable recession is often met with “this time is different” arguments.
And this time is different.
Read the full article on OZY here.