Asset Allocators' Soapbox: Why debt is the biggest risk of all to markets

In conversation with a client, I was recently asked about the greatest risks to the financial markets. Before answering, I ran through various possibilities such as Ukraine, the Middle East or the European slide towards deflation, before answering: debt. They looked surprised, so I explained… Undoubtedly, there are risks from geopolitics. If the situations deteriorate sharply, then there could be a major energy shock to the world economy. Similarly, it matters enormously that the EU, the world’s second largest economy, is seeing such a weak expansion. These are cyclical matters, though, ...