A financial storm is coming that governments cannot fight

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The government is struggling to keep up with the rapidly growing risks in the private credit sector. This sector, often referred to as “shadow banking,” has ballooned since the 2008 financial crisis, filling the gap left by traditional banks. However, it remains largely unregulated. The “waterbed” principle of finance means that pushing down risks in one area simply causes them to rise in another, leaving regulators perpetually one step behind.

Moreover, the global economy’s fragmentation and rising geopolitical tensions have stymied international regulatory efforts. The post-financial crisis reform agenda has lost momentum, and today’s world is far too divided to replicate the coordinated global response seen in 2009. Governments, already stretched thin financially, lack the resources or political will to intervene effectively. As a result, the risks posed by the burgeoning private credit sector could go unchecked, potentially leading to significant systemic issues.

  • Private credit sector size: $1.8 trillion globally
  • Goldman Sachs raised $13.1 billion for private credit investment, totaling $20 billion
  • Private credit and leveraged lending doubled over the past decade
  • Non-bank finance now accounts for half of all UK and global financial sector assets
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https://finance.yahoo.com/news/financial-storm-coming-governments-cannot-070000457.html

No one has witnessed the U.S. money supply do this in 90 years

Based on data from the Board of Governors of the Federal Reserve, the M2 money supply peaked in April 2022 at $21.722 trillion. As of March 2024, M2 came in at $20.841 trillion. While this might look like a fairly tame decline of $881 billion (4.06%) spanning roughly two years, it represents the first decline of at least 2% in M2 money supply since the Great Depression.

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https://www.fool.com/investing/2024/05/05/us-money-supply-great-depression-big-move-stocks/