First of all, I proudly present a 2-minute short that I animated!
...And the same thing on YouTube, in case one loads better than the other:
One thing I learned making the film is that my Russian accent colors not only my words, but any noise coming out of my mouth. So I'm not the most versatile voice actor.
Anyway, we certainly have a debt crisis, and easy credit policies keep producing still more debt. I don't think interest rates have ever stayed so low for so long, everywhere.
Economists argue both for and against debt expansion [1], as they argue about everything.
My own take is as simple as my sparse knowledge ought to make it:
- Unprecedented conditions produce unprecedented outcomes.
- Booms are usually gradual, and busts are sudden.
No unusual boom has gradually arisen from unusual monetary policy, and it's been a while. But something unusual ought to happen in unusual conditions! Thus one expects a sudden, unusual bust down the road.
That's it. It's like a physicist's proof [2] that one's attractiveness peaks at some distance from the observer. At the distances of zero and infinity, visual attractiveness is zero (you can't see anything.) Therefore, attractiveness as a function of distance has a maximum somewhere in between. True, kinda, and it didn't take a lot of insight into the nature of attractiveness – much like my peak debt proof doesn't require an understanding of the economy [3].
Will today's "Brexit" trigger the global downturn predicted by Yossi Kreinin's Rule of Unprecedented Conditions? Probably not by itself. I think it's a symptom more than a cause [4], and the big bad thing comes later.
In the meanwhile, here's to hoping that my little film (started when "Grexit" was a thing, completed just in time for Brexit) was funnier than the average forward from grandma [5].
Happy Brexit! And if you follow people on Twitter, there's a strong case for following me as well.
[1] Bibliography: Nobody Understands Debt except Krugman; Does Krugman Understand Debt?
[2] I think a particular famous physicist said it, but I forget who.
[3] ...and I can't say I have any understanding of the economy. That said, I've owed and paid off a lot of debt, and got to negotiate with many bankers. And I can tell you that "debt is money we owe to ourselves", Krugman's catchphrase, feels unconvincing to creditors – as many people and whole nations have found out.
[4] In fact, I just got an email from an asset manager saying that it's good for the UK in the longer run, elevating Brexit from a symptom to a cure. But he didn't say "good for everyone", and then I'm not sure his crystal ball is better than yours or mine.
[5] I linked to /r/forwardsfromgrandma since, regardless of the politics of either its members or their grandmas, I ought to give credit for the brilliant term – it's definitely funny because it's true. I've watched many relatives acquire the habit of forwarding various wingnut stuff as they age. Most frighteningly, my own urge to email such things gets harder to resist every year. I can sense my own ongoing grandmafication; between you and me, an animated short about debt might be a part of "it." Scary, scary stuff.