Johnson: Brace for a Long Recovery From Credit Glut

Until recently, the standard narrative most analysts applied to macroeconomic news went like this: We had a major financial crisis in the fall of 2008, which immediately brought on a severe recession that would be followed by relatively fast recovery.
All countries suffered to some extent; all should recover, albeit presumably at varying rates, and reasonable people could disagree about which nation would grow faster and in a more durable manner.
The prevailing thought was that a rising tide lifts all boats. It turns out that may have been the wrong maritime metaphor. A more apt image may be the advice to investors attributed to Warren Buffett: “You don’t know who’s swimming naked until the tide goes out.” The questions that preoccupy us now are: Is the tide coming in or still going out? Or did the big storm permanently ruin the beach?
To get a fix on where the global economy is heading, start by thinking about just three countries: the U.S., Germany and China. For all three, the central issue is the same: Credit.
Each nation is contending with a different kind of credit crisis, but the crux of the problem is the same for all: How to move away from a model of growth based on very high leverage, while still managing to grow.
 ....
...
Economic development is often described as “catching up.” But the prospects for global growth in the short term greatly depend on whether China can avoid following in the footsteps of the U.S. and Europe.
Growth based on a great deal of leverage has proved fragile, but we haven’t yet moved to a different model. For now, the transition away from high levels of private and public sector debt will most likely be prolonged. It will certainly be painful. 

full

______________________________________________

πολύ καλό