Jim Rickards reviews the potential losses in the junk bond market around the world due to the oil price decline and the dollar's impact on emerging market debt. The following is a quick summary; the full article can be read at The Daily Reckoning in A Perfect Storm.
Over the coming months, I believe we could see an economic meltdown at least six times the size of the 2007 subprime mortgage meltdown.
In the national defense community, military commanders are known for fighting the last war. They study their prior failures in preparation for the next conflict. The problem is that each war inevitably involves new tactics for which they’re completely unprepared. The same mistake is made in financial circles. Financial regulators are no different than military commanders. They fight the last war. The last two global meltdowns, in 1998 and 2008, are cases in point.