The three-body problem and debt in the year 2018

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"We cannot therefore avoid the question that Hyman Minsky posed —whether a monetary economy with debt contracts and capitalist financial institutions will ever be stable, and in particular whether stability is possible as long as there are fractional reserve banks.”

 --Adair Turner

 Commentary & Analysis

The three-body problem and debt in the year 2018

 Different year, same problem—debt overhang!

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Despite the best efforts of governments and central banks we remain to a large degree mired in the same trap thanks to global supply exceeding demand in manufactured goods and commodities.  Though we see it in all economies where legacy assets are protected by crony capitalism, the poster child is China whereby much of their debt build has been funneled into unproductive assets in the absence of real demand, all in an effort to keep nominal economic growth numbers on track….READ MORE

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