The point of inflection is the lift off where debt induced contraction and financial stress generate uncontainable and unstoppable momentum and the financial crisis greatly accelerates. The vortex of the 2008 crisis was housing and mortgage finance. The vortex of this one is sovereign credit, which will make it much more severe. Governments, aided by their central banks, picked up much of the tab for the 2008 crisis, and their debt loads have increased since then. Central banks have monetized much of that debt and have kept its cost to governments down by suppressing interest rates. The notion that expanding debt and central bank machinations could keep economies afloat was always specious. Now those nostrums have been exhausted, so governments and central banks can’t staunch the coming global margin call with hastily conceived rescues and other chimeric Hail Marys.

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