Hidden Forces The Asian Financial Crisis & the Birth of the Age of Debt | Russell Napier
Jul 19, 2021
Russell Napier, financial historian and author who studies money, credit, and crises, joins to revisit the Asian Financial Crisis. He traces how credit booms, carry trades, and cross-border liquidity sparked rapid contagion. Discussion covers managed exchange rates, hidden bank lending, and why seemingly strong economies became vulnerable.
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Double Your Time Horizon Estimate
- When you spot an unsustainable pattern, estimate its maximum duration, double it, then subtract a month.
- Use that extended timeframe to decide whether to stay exposed or reduce risk.
Capital Quality Matters With Pegs
- Managed exchange rates make the composition of capital inflows crucial because one fixed variable simplifies the balance equation.
- Napier flagged deteriorating capital quality—less FDI, more short-term bank and portfolio flows—as the alarm bell.
Speed Of Capital Is Destabilizing
- Liquefaction of assets and fast cross-border flows amplify and accelerate crises.
- Napier argues the planet can't cope with current speed of capital movements and will slow them over time.
