Here we are on the 10th anniversary of the Great Financial Crisis, and the debt pile is greater, the quality is worse, and the US stock market is markedly more over-valued.
If Mr Kindleberger was here today I think he would be highlighting the mantra of his contemporary, the economist Hyman Minsky – stability breeds instability.
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He believed periods of prosperity, inflated by debt and financial innovation and speculation, give way to financial instability.
He went further and said that the financial system is inherently unstable, fragile, and prone to crisis.
Don’t stray too far from the emergency exit.
Brian Dennehy is managing director of FundExpert.co.uk
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