Is there a crisis that we have not witnessed? – Finance

Too good to be true.

Latest edition of The Economist He puts this phrase on its cover and accompanies it with a drawing showing a person walking with his dog. Walking on empty.

Through this image, what the influential British weekly newspaper wants to convey is just that It appears that economic laws And gravity She was interrupted.

Is it possible that they really are no longer working or is this an illusion?

Interest rates should be rising in recent months and years It led to a slowdown in economic activity However, this does not seem to have happened.

In the third quarter of this year, US economic growth as measured by gross domestic product reached a record high. 4.9 percentin terms that Americans usually take into account.

On the other hand, it seems that with the rise in interest rates set by the monetary authority in the United States, this was expected The recession that never arrived.

Moreover, the fact that 10-year Treasury bonds Reaching the level of 4.9 percent annually a few days ago means that the possibility is being considered that the period of high interest rates will be very long, not just a few months, but even a few years. Is it Highest level since 2007

If so, it will be very difficult to sustain the economic expansion scenario.

Even those who in the past went into debt in the era of low interest rates, in the era of cheap money, certainly They will have to refinance the debt soon.

These refinancing operations, whether carried out by governments, companies or families, will lead to high financial costs, which will limit spending.

Perhaps the most obvious case is that of governments.

as a result of Expansionary financial policies Applied during the pandemic, the public debt stock, as a share of GDP, is on average more than… 100 percent in developed countries.

The Economist He points out that there is evidence that it is the highest level since the Napoleonic Wars in the early nineteenth century.

As the cost of debt rises, this is more likely to happen Restrict spending public to face this circumstance.

Even in Mexico, where public debt as a share of GDP is less than 50 percent, it can be seen in the Finance Ministry’s forecasts for 2024, Significant growth in financial costs Of the public debt, about 17 percent, in nominal terms or a little More than 12 percent in real terms.

The problem is not limited to government debt.

For many years we have had economic signals that support the influence of corporations or families.

It was not envisaged that there would be clearly high interest rates.

But what happened is that inflation flared up, interest rates rose, and now, instead of causing economic activity to slow, it continues to advance.

fact that High interest rates can last for a long time, It creates an unprecedented situation, the outcome of which is uncertain.

This is the big fear. We don’t know what will happen if big money becomes the norm for several years.

This is the big mystery surrounding the risk of a crisis next year.

Hopefully not.