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by Colman
Mohamed El-Erian in the FT is expecting the real economy to have its revenge on the financial system shortly:
Persistent financial dislocations have now caused the real economy to become, in itself, a source of potential disruption. During the next few months there will be a reversal in the direction of causality: the unusual adverse contamination by the financial sector of the real economy is now morphing into the more common phenomenon of recessionary forces threatening to undermine the financial system.Well, if you will run a system based on the idea that you can spend beyond your means indefinitely ... I'm not sure it's fair to describe this as the real economy contaminating the financial system: the consumers have been living beyond their means precisely because they were encouraged to and taught to by the financial industry.
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Revenge of the real economy | 25 comments (25 topical, 0 editorial, 0 hidden)
Revenge of the real economy | 25 comments (25 topical, 0 editorial, 0 hidden)
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