When Long-Brewing Instability

Keep an eye on the system’s buffers. They look fine until they suddenly collapse.

The doom-and-gloomers among us who have been predicting the unraveling of an inherently unstable financial system appear to have been disproved by the reflation of yet another credit-asset bubble. But inherently unstable/imbalanced systems can stumble onward for years or even decades, making fools of all who warn of an eventual reset.

Destabilizing systems can cling on for decades, as the inevitable crisis doesn...