Larry Summers, the former Treasury Secretary, cautioned that the US may be heading towards a financial crisis similar to that experienced by the UK in late 2022 due to reckless economic policies. He reflects on former UK Prime Minister Liz Truss’s quick resignation after implementing tax cuts that destabilized markets. Summers noted the troubling parallels in market responses between the US and emerging markets, with stock prices and currency values declining, suggesting that current trends could lead to substantial economic repercussions for both the US and the global economy.
Stocks go down, bonds go down, the currency goes down, gold starts to be hoarded, that's the pattern we're seeing in the United States.
I think we're on a path towards having an episode like that. I think it will be very costly for our economy - and for the global economy.
It's hard to know what the endpoint will be. We've seen a phenomenon in the United States, it's almost unprecedented in our financial history.
Now I think we're on a path towards having an episode like that. I think it will be very costly for our economy - and for the global economy.
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