by Nomi Prins
Crises are based on compound bets (or debts) gone awry. As with lightning, though, crises don’t usually strike the same place twice, not consecutively, anyway.
Over the past two decades, we’ve seen the emerging-market collapse in the late 1990s, the Enron-led crime spree in 2001–02 and the housing-spawned financial crisis of 2008. Since that last crisis, the Fed’s cheap money policy has helped big banks and corporate customers, but most regular people have not fully recovered.
Regardless of whether the Fed raises rates or keeps recklessly bating business media about the possibility, these connected debt pockets can crush the economy again. Here, I’ll lay out how they can push us over the edge. Understanding these connected debt bubbles means that you can not only survive the looming implosion but also come out ahead.