22/03/2023
What is a Minsky Moment?
Are we on the brink?
Minsky Moment crises generally occur because investors, engaging in excessively aggressive speculation, take on additional credit risk during prosperous times, or bull markets. The longer a bull market lasts, the more investors borrow to try and capitalize on market moves. Minsky Moment defines the tipping point when speculative activity reaches an extreme that is unsustainable, leading to rapid price deflation and unpreventable market collapse.
Although the U.S. has been experiencing an extended period of economic prosperity, debt levels are rising, and speculative activity is robust, although it does not appear to have reached the extreme levels that presage a Minsky Moment.
Wolf Outta Wauchope
