The Crisis to Come
Every indicator points to an economic collapse — but it won’t be a new one. It’s part of the process we’ve been living through for 25 years.
The original (Spanish) version of this article can be found here.
“I am anti-life, the Beast of Judgment.
I am the dark at the end of everything.
The end of universes, gods, worlds…of everything.
And what will you be then, Dreamlord?”
“I am hope.”
― Neil Gaiman, The Sandman, Vol. 1: Preludes & Nocturnes
A few weeks ago the US Fed cut interest rates by 0.5 points. It was a decisive move in the same direction as another move the European Central Bank had made just days earlier: central bank managers can see the crisis that’s coming.
And I’m well aware that there’s no more useless way to look like an idiot than to make predictions. The world is so complex that the odds of a prediction not coming true are essentially infinite, while the odds of getting it right are vanishingly small.
But if we look back at the recent crises we’ve lived through, it becomes clear that seeing them coming would have helped us make better decisions. And save ourselves a great deal of pain. Perhaps even reinvent a new world in their wake.
So I can’t resist making this prediction, because the opportunity cost of being wrong — of you all thinking I’m an idiot — is tiny compared to the possibility of being right, and of this piece helping us get ahead of what’s coming.
Here is the thesis: I believe that in the coming months — say, within 12, or by the time interest rates fall back toward zero — another global crisis will hit, one that will once again turn the world upside down. It won’t happen for cyclical reasons, but for causes that have been quietly brewing for decades, even centuries, and that have come to a head in the twenty-first century.
It won’t be a new crisis, but the third act of the same event — one we’ve been living through in slow motion since the spread of the internet, with a first episode in the dot-com bubble and a second in the 2008 mortgage bubble.
Continue reading at eldiario.es »
Photo by Braedon McLeod on Unsplash