Large debt crises. The principles of overcoming

The book shows a template that clarifies how all debt crises occur, and the basic principles of overcoming them are formulated.

Loans are difficult to evaluate as “good” or “bad”, because development in the economic sphere most often occurs precisely due to the debt borrowed. If the economic benefit of using borrowed funds is sufficient to return the money, this is good. If lending conditions rigidly require guaranteed debt payment with interest, then there will be less loans and development will slow down. If the conditions are more flexible, this contributes to greater development, but it can create serious problems that will cross out all the benefits created: the “bubble” will be formed in the economy.

Bridgewater has done a huge work on a retrospective analysis of debt crises of different states. This analysis helped to realize their causal relationships, highlight several archetypes of the crisis and develop the principles of successful overcoming for each option.

These principles and decision -making algorithms help Bridgewater prepare for economic “storms” ahead of time, even for those that have not happened in our century. A few years before the financial crisis of 2008 (and such events did not take place in the economy since 1929–1932) the company developed a special “meter of depression” - and successfully overcame the crisis when almost all the others suffered huge losses.

The book has a huge amount of material for thought and analogies.

Book chips
General theory of development of debt crises.

Comparative analysis of 48 crises of different countries.

detailed analysis and news background of several largest crises.

For whom this book
For statesmen, investors, managers, business owners, economists, financiers and everyone who is important for whom to see “bubbles” in the economy in advance.

From the author
After the events that I had not yet previously found me, I decided not to rely on my own experience, but to study all major economic and market shocks in history and make it so that they seem to me my own “Virtual experience” - that is, as if I myself experienced these events in real time. In this case, I would have to bet on the market, as if I knew only what happened before that moment. I achieved this, having studied in detail examples from history in chronological order, experiencing each of them as if I personally stayed in those realities for many days and months.

This experience has significantly expanded and deepened my vision of the issue in comparison with the way I relied only on my own experience. During my life, I went through the decay and gradual decay of the global currency system (Bretton Wood system) in the 1966–1971, the inflationary “bubble” of the 1970s and its “gap” in the 1978–1982, Latin American depression 1980 -x, the Japanese “bubble” of the late 1980s and its “gap” in 1988–1991, global debt “bubbles”, as a result of which “the collapse of the dotcomes” occurred in 2000, and the “Great Delever of 2008” . Studying the history of the economy, I was able to become a witness and participant in the collapse of the Roman Empire in the 5th century BC. e., debt restructuring in the United States in 1789, lives in the Weimar Republic in the 1920s, global great depression and World War II, who overwhelmed many countries in 1930–1945, as well as many other crises.

It seems to me that watching the economy and markets (or anything) day after day is the same as being in the epicenter of an emaciated drill, when millions of particles of information beat in the face, and you need to be able to synthesize them in one and one React to everything at once. Having done this work, you will notice that the course of all historical examples passes, in fact, the same way, as described in the “archetype”, while you will notice their differences and think about why there are these differences and how to explain them, what will deepen your understanding of the issue. Thus, when the time of the next crisis comes, you will be better prepared for it