(B) Ten years ago, I wrote a blog post “The Public Debts of the Developed Nations Could Well Lead to the Next Financial Crisis“. Ten years after, it seems that nothing has changed except that now developing countries (China, Brazil, and India) are joining the club. The total debt of the 11 most developed and developing economies is now $13 trillion debt as reported in an article by Bloomberg.

As long as the economic growth exceeds the rate of inflation, public deficits do not seem to matter anymore to any government. And in the medium-term, both fiscal and monetary policy, as interest rates will be kept low, will likely remain very accommodative, and so will continue to feed exuberance in the stock market until the next Black Swan.

Note: The picture above is the lagoon in Foster City, CA.

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