Minsky's warnings are fading away

[Cigarbutt]

Thought this was a nice article giving perspective on Hyman Minsky, the economist. (From David Hay, Gavekal)

Credit amplifies business cycles.

Where are we in the cycle (supercycle)?

I somehow feel that bottoms have not been tested.

Enjoy the ride.

 

http://files.constantcontact.com/3bf703a6001/0b7092c0-e570-46ec-8b59-4c01e6d749aa.pdf?ver=1496433429000

[jb85]

total credit to GDP has stopped shrinking and is either flat lining or going up again

 

https://fred.stlouisfed.org/graph/?graph_id=316529

[TwoCitiesCapital]

total credit to GDP has stopped shrinking and is either flat lining or going up again

 

https://fred.stlouisfed.org/graph/?graph_id=316529

 

This is a bit misleading. "Total" credit would be inclusive of corporate and gov't where this is simply households and non-profits. Total debt across public and private sector has never stopped growing - even when expressed as a percent of GDP.

 

See p.i (p.3 in the pdf) which shows the progression over the last few years of Domestic Nonfinancial Debt https://www.federalreserve.gov/releases/z1/current/z1.pdf

[rb]

Government's borrowing in own currency are not subject to Minsky moments.

[TwoCitiesCapital]

Government's borrowing in own currency are not subject to Minsky moments.

 

Not making an argument one which way or another. Printing yourself out of debt and into hyperinflation is its own kind of problem. Was simply showing that the title "total debt to GDP" that excludes public debt is misleading.

[Aberhound]

Government's borrowing in own currency are not subject to Minsky moments.

 

Except for Venezuala, Argentina and Zimbabwe, and now with cryptocurrencies probably Italy, Greece and Portugal forcing the EU federal union.

 

Isn't that the purpose of the Anglo alliance for allowing cryptos?

[rb]

Government's borrowing in own currency are not subject to Minsky moments.

 

Except for Venezuala, Argentina and Zimbabwe, and now with cryptocurrencies probably Italy, Greece and Portugal forcing the EU federal union.

 

Isn't that the purpose of the Anglo alliance for allowing cryptos?

Yea none of those countries you listed borrow/borrowed in their own currency.

[jb85]

 

This is a bit misleading. "Total" credit would be inclusive of corporate and gov't where this is simply households and non-profits. Total debt across public and private sector has never stopped growing - even when expressed as a percent of GDP.

 

 

I included (DODFS) and (TBSDODNS) in the above graph. These are financial and nonfinancial company liabilities.  This should include everything and matches what i've seen is about 330% total credit to GDP.  I'd be curious to see figures that show total debt to GDP that is signficantly higher than this...