The recent rally in stock markets came to a sudden end, and after a brief period of renewed confidence, the question “how much worse can “It” get?” is once again doing the rounds. My answer is: a lot worse. The empirical grounds for this assessment are: • The ratio of asset prices to consumer prices–or the inflation-adjusted asset price index; • The ratio of private debt to GDP; and • Japan In short, global asset markets have a lot further to fall, and a serious recession–the worst we have experienced since the Great Depression–is inevitable.
これは2008年8月の記事ですので、リーマンショックの前ですが、３つの根拠を挙げて、sereious recession the worst we have experienced since the Great Depression–is inevitable（大恐慌以来最悪のリセッションは不可避である）と結論付けています。
さらに、バブルの背後に存在し、バブルを致命的にするものとして、借金（Debt）の存在を挙げています。 The killer behind the Bubble: Debt The level of overvaluation of asset markets reflects the unprecedented scale of private debt, both here and in America–since the vast bulk of that debt was undertaken to finance “Ponzi” speculation on shares and housing. This is the reason that this recession will be so severe–as will the asset market bust. ・“Ponzi” speculation：ねずみ講
Every “recovery” from a debt-induced recession since 1970 has involved resumption in the tendency for debt to grow faster than GDP (see Figure 12, where the once seemingly major debt crisis of the late 80s is now just a pimple on the upward trend of the debt ratio to its current unprecedented level). ・resumption：続行、再開 ・pimple：吹き出物
Yet today the debt to GDP ratio is more than twice that of the Great Depression. It is simply cannot go any higher. Who else, after all, can banks lend to, now that they have exhausted the “subprime” market? The only way for the debt to GDP ratio now is down (unless we’re unlucky enough to experience deflation, in which case the ratio will rise further, as in the Great Depression), and as it heads down, so will output and employment. A serious recession is inevitable.
Welcome to “the recession we can’t avoid”.
100年に１度の危機といわれますが、“the debt to GDP ratio is more than twice that of the Great Depression”ということですので、GDPに対する借金の比で見ると、大恐慌のときよりさらに悪いということです。