by Bob Bryan
Debt will get the US into a monumental pickle, or at least Lacy Hunt thinks so.
Hunt, one of the leaders of Hoisington Investment Management, which manages over $4 billion, said the increasing debt among corporations and the government was going to take the country down a startling path.
“The traditional business cycle model said that recessions are brought in by rising interest rates and rising inflation,” Hunt said this week during an interview at the Mauldin Economics’ Strategic Investment Conference.
“However, when economies are extremely overindebted, the economies can turn down under the weight of the debt. We’ve seen four recession in Japan in the last seven years with interest rates at zero and inflation negative.”