The Grey Fire Horse

Paper 1 argued that debt creates the conditions for a crisis but rarely chooses the moment. That is the job of an accelerant: an event or policy that sharply speeds up the debt cycle. Some come from outside the system, such as a war or an energy shock. Others are generated by the debt cycle itself, when cheap credit is channelled into investment that runs ahead of the returns it can earn. This paper analyses the three accelerants in play today. Iran and energy, an external sh

Debt, the master variable, and how it becomes the market event Every year the major institutions publish their risk outlooks. Every year they list geopolitics, technology and trade fragmentation, and every year markets still surprise them. This paper argues that they are treating symptoms as causes. Since the end of the gold standard in 1971, global debt has grown from around 100% of world GDP to more than 235%. Four decades of falling interest rates sustained that rise. Leve

INTRODUCTION This brief paper explains the key issues around government debt sustainability. Government debt has risen substantially, and interest rates are no longer low. The result is that debt interest is becoming a real burden on government budgets that are already stretched after years of profligacy. It also sets out which data to track, which commonly quoted statistics mislead, and why, for a government that borrows in its own currency, the real question is never whethe