✊ Why I'm not giving up on a New Roaring '20s

Back in 1997, financial turbulence in Asia also arrived in the US amid an emerging productivity boom

Breaking News: In a pivotal Asian economy, financial markets experience sudden and severe turmoil. Stock indices plummet, recording their worst performance in decades. Simultaneously, its currency undergoes a dramatic, stomach-churning shift, causing ripple effects across various sectors of the economy.

This volatility isn't confined to domestic markets, however. Given the country's significant role in global finance, concerns quickly arise about potential worldwide economic consequences. Investors, both domestic and international, scramble to adjust their positions. This leads to rapid unwinding of speculative bets and amplifying of market movements. America is no safe harbor as stocks tank and recession fears rise.

Financial headlines from August 5, 2024? You bet. But it was much the same story on October 27, 1997. Back then, a financial crisis started in Thailand and spread across East Asia. Today, a tightening by Japan's central bank has led to a rapid strengthening of the yen and a sharp decline in Japanese stocks, exacerbated by the unwinding of leveraged investments and carry trades. In each case, American investors eventually took a hit, due both to financial machinations and fears of an impending downturn, (For what it’s worth, Goldman Sachs just raised US recession odds to 25 percent from 15 percent.)