In 5 years, the world will be completely different

The problems associated with Silicon Valley Bank are not just a regional bank problem. They affect some institutions with bad asset-liability mismatches, but not those without such mismatches. The world has acquired leveraged long-term financial assets.

In other words, it's not just bonds, but other financial assets, borrowing money at cheap interest rates and buying those financial assets. This is a balance sheet type of question.

We face a severe imbalance between supply and demand. It's difficult to keep interest rates high enough to benefit creditors without hurting debtors. So we see that they have to lower their demand for credit. But if you keep that interest rate, let's say the actual interest rate is 1% or 1.5%. Then that will create very tight credit conditions, which will mean slower or no growth.

Fed monetary policy must remain unchanged, which means real interest rates will be closer to 1%, which will reduce growth to between 0% and 1%.

Because of all five forces: the debt problem, internal politics, external geopolitics, natural behavior, and the technological changes that are changing the way we think, and the consequences of that, the world will be a completely different place in 5 years .