Big debt crises

I am writing this on the tenth anniversary of the 2008 financial crisis in
order to offer the perspective of an investor who navigated that crisis
well because I had developed a template for understanding how all debt
crises work. I am sharing that template here in the hope of reducing the
likelihood of future debt crises and helping them be better managed.
As an investor, my perspective is different from that of most economists
and policy makers because I bet on economic changes via the markets
that reflect them, which forces me to focus on the relative values and
flows that drive the movements of capital. Those, in turn, drive these
cycles. In the process of trying to navigate them, I’ve found there is
nothing like the pain of being wrong or the pleasure of being right as a
global macro investor to provide the practical lessons about economics
that are unavailable in textbooks.
After repeatedly being bit by events I never encountered before, I was
driven to go beyond my own personal experiences to examine all the big
economic and market movements in history, and to do that in a way that
would make them virtual experiences—i.e., so that they would show up
to me as though I was experiencing them in real time. That way I would
have to place my market bets as if I only knew what happened up until
that moment. I did that by studying historical cases chronologically and
in great detail, experiencing them day by day and month by month. This
gave me a much broader and deeper perspective than if I had limited my
perspective to my own direct experiences. Through my own experience,
I went through the erosion and eventual breakdown of the global
monetary system (“Bretton Woods”) in 1966–1971, the inflation bubble