The United States is no stranger to asset and credit market bubbles or to the deflationary consequences of their bursting. After all, this is what occurred as recently as 2008. When the U.S. housing and credit market bubble burst, the Great Recession soon followed.
The 2008 experience makes it surprising that today’s economic debate is so heavily focused on the risk of returning to the inflation of the 1970s. This is especially the case at a time that the world is experiencing a much more pervasive asset price and credit market bubble than the earlier U.S. housing and credit market bubble. It is also surprising at a time that a new vaccine-resistant variant of the virus threatens a new round of economic dislocation that could prove to be the trigger that bursts today’s bubbles.
Anyone doubting the pervasiveness of today’s global “everything” asset price and credit market bubble need only look at the financial stability…
