David Lentz

What Will Trigger the Next Global Economic Crisis?

An interesting story. My own feeling is that the dam may break in the Indian markets, another place where enthusiasm runs amuck but one where the government has considerably less control over how events proceed.

The transparency we take for granted in the domestic American markets is absent in most of the rest of the world, and very few people appreciate what transparency in the markets does to risks.

Doubtless some break in the dam is coming, although it's difficult to say whether it will happen next week or next year. But why would people flock to the inflating US dollar as a safe harbor of "quality", as opposed to gold? It seems to me that central banks the world over have been lax on keeping inflation at bay, choosing inflation and boiling the economic stew over stable currencies.

I would expect to see a flight from paper currencies rather than a flight to the most profligate inflator of the bunch.