The era of easy money is over

The writer is Ruchir Sharma chairman of Rockefeller International

While global investors increasingly recognise that the easy money era is over, many world leaders do not — and the markets are punishing them for free spending in the new age of tight money.

In the 2010s, when interest rates hit historic lows, markets punished very few free spenders — Greece, Turkey and Argentina, most notably — for extreme fiscal or monetary irresponsibility. Now inflation is back, rates are rising and debt levels have been elevated worldwide, investors are targeting an expanding list of countries.

Basically we have maxed out our credit card

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Easy money goes away when there are no more rubes to be fleeced…

Then there is the phrase “there is one born every minute”…

You do realize supply side econ in the US was the easy money…you do know that?

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Loosen lending standards. It has worked so well in the past. How do you think automakers keep putting people in ever bigger, more expensive, cars? Financing periods have gone from 36 months to 84.

Steve

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Easy money comes and goes, I suspect it will be back before you know it.

I remember easy money in the late 80’s (then FSLIC crashes), the 90’s (then internet bust), the 00’s (strippers buying houses by the 6-pack), and the late teens, early 20’s. That’s four spurts of the juice in just the past forty years.

You’d almost think its endemic or something; maybe it’s just that people have short memories. War is like that too, just a bit less frequent.

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War is actually more frequent.

Odd thing…The federal debt load dropped substantially under Ike.

In other words we produced a lot more relatively speaking as a nation. As opposed to putting it on the card.