On reflection, I think that there are perhaps other, even larger, events in our future than the recent credit crisis and recession; yet, just as in 2006, there is a great deal of complacency. But as we will see, there are fingers of instability building up that have the potential to create large disruptions, both positive and negative, in our future.
Thus writes John Mauldin. When a guy who predicted our recent financial crisis is predicting another event, but bigger, I pay attention. Mr. Mauldin presents a far more complex alternative to my theory of “the straw that broke the camel’s back”, but the upshot is the same: some seemingly insignificant event will cause a huge systemic problem. Last time, it was too much private debt. This time it will be too much public debt. Mr. Mauldin’s article is well worth the read.