Modern Economic Nonsense — Recession is coming
The global economy is a house of cards. The 2008 financial crisis was just the first sign that things were not well. Since then, central banks have been artificially stimulating the global economy through quantitative easing and record-low interest rates to prevent another recession. But these measures cannot go on forever. When interest rates reach their lowest possible point, there’s no further that they can go down. With most central banks now ending their QE programs, we are approaching the end of an unprecedented period of monetary stimulus that has kept the world afloat for nearly a decade after the last recession. What comes next will be very different from what we’ve experienced so far. In a recent interview with Dutch newspaper De Volkskrant, billionaire investor Warren Buffett warned that “the next recession will come sooner than people expect” and will be more severe than in 2008 because monetary policy has backed up against its limits. Markets remain overpriced, he said, and artificial stimulus won’t work for much longer. “We are sitting on a keg of dynamite that will explode sooner or later,” he said. This time, the recession is not because we are running into economical trouble, it is we are having too much wealth!
