Juggling Dynamite

Alex Tapscott is co-Author of the new book Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World. Here is a direct video link.

Danielle was a guest today with Jim Goddard on This Week in Money, talking about recent developments in the world economy and markets.  You can listen to an audio clip of the segment here starting at 7:47 on the playbar.

Whether they’re aware or not, debt-gorging consumers and businesses have all been banking on the same unreasonable assumption:  that consumption/sales and wages will increase and economic growth continue to expand, without a downturn, indefinitely.  But more than 8 years since the last recession, that bet faces increasingly unfavorable odds.  And having used the extra-long expansion since 2009 to accumulate record debt, rather than pay it down, fall back plans are now generally non-existent.  Not good financial or business planning.  No expansion cycle can last forever, especially one this dependent on adding more debt.  See:  Not a Dot-Com Bubble, Not 2007, But a Nasty Mix of Both.

This chart showing the leverage on corporate balance sheets today, versus the past cycle peaks in 2000 and 2007, is not a picture of strength and resilience.