Longview Economics: Another chapter of the GFC is unfolding

Longview Economics: Another chapter of the GFC is unfolding. Despite recent optimism, the outlook for EM economies is still poor (with more episodes of fear/stress likely over the course of coming months & quarters). Whenever money has tightened in the past 7 years, the world has entered crisis mode. In 2006-07 money tightened to address inflation which burst the US/Western housing bubble. In 2010, as QE1 drew to a close, the Eurozone debt crisis began (starting with Greece - and then broadening/deepening each time a QE program ended). Now, with tapering underway (as well as tightening liquidity in China), another chapter of the GFC is unfolding. Europe, in that respect, is particularly vulnerable with $3.4 trillion in banking exposure to emerging markets. (i.e. 4x the exposure of the US, see chart). (VIEW LINK)