It is becoming clearer by the week that the world economy has entered a very unstable phase which could lead to a financial crisis, or even a major downturn, in the near future. The factors that are today pushing the world economy toward a cliff are driven by developments first and foremost in the US, but the same deep ailments are present in a whole series of other key economies. These fundamental problems are not new, but what is striking is both how numerous they are and how they are all being exacerbated at the same time.
These include inflationary pressure which has worsened due to the US war with Iran and its effect on oil prices. Inflation, in turn, is a key factor pushing up interest rates in the bond markets. Rising interest rates will increase borrowing costs for businesses and consumers as well as interest payments for governments now saddled with historically high…
