Jumbo Problems For Investors – Two Elephants In The Room?

The perils of rising debt and falling liquidity

Are we building up for another market Crash? Seeing the vertiginous fall in World bond prices it must feel that way. The roots come back to debt and liquidity. Liquidity needs to rise hand-in-hand to support rising debt levels: more debt requires, more liquidity and without liquidity, crises occur. Recall that every recent Crisis, namely 1997/98, 2008/09 and 2019, has been first-and-foremost a debt re-financing crisis. What is more, each crisis has tended to create the next one, leading to a recurring 8/9-year financial cycle.