Debt cycles, long and short

Two cycles run on top of each other. The short one (5–8 years, credit-driven) drives recessions. The long one (50–75 years, debt-level-driven) decides whether the next thirty years feel like the 1950s or the 1930s.

We are late in a long cycle. Most major economies have aggregate debt levels (public + private) at historical peaks. The next decade is about which mechanism does the resolving — and your housing, savings, currency, and career decisions all bend on the answer.

Inflation

real burden falls

Restructuring

creditors take haircut

Austerity

growth pays slowly

War / disorder

bad option, picks itself