ABCs of the Coming Credit Crunch?

Dominant Social Theme: Markets go up and down. Not to worry.

Free-Market Analysis: This is a good analysis of what could go wrong with world markets (especially Western and US ones) and why ... It touches on a number of memes: Sort through them to better understand what's taking place, or what could take place – and could not.

More:

Maybe it's too quiet. Last week, Ray Dalio, the founder of the $165bn (£110bn) hedge fund Bridgewater Associates, wrote a widely-circulated note warning his clients that the US Federal Reserve risked setting off a 1937-style crash when it starts raising interest rates again. 

Dalio provides us with a grim forecast here, and also offers us a question. Can even a modest rate increase destabilize markets worldwide? Are they that fragile? And what about vaunted central bank interference in the marketplace, not to mention the "plunge protection team"?

With all the buying power at its disposal, does not the Fed along with other central banks have the wherewithal to conquer any sudden downturn at least in the short term?

Read the entire article