A hard landing for the global economy
As the world’s major central banks begin to adopt hawkish monetary policy stances, there is some good news and some bad news about the world economic outlook.
The good news is that the world economy does not appear to be suffering from the same vulnerabilities that made the 2008-2009 Great Recession so severe. The bad news is that the world economy now suffers from a different set of troubling vulnerabilities. Those new vulnerabilities make it likely that the forthcoming global economic recession will be more severe than the average post-war economic recession, albeit not as severe as the 2008-2009 recession.
Among the factors that made for the severity of the 2008-2009 global recession was a once-in-a-century U.S. housing and credit market bubble coupled with very poor bank lending standards. Those poor standards included the infamous sub-prime lending and NINJA loans.
Fortunately, lessons were learned from that…
