Global economy faces some of the same challenges of the 1970s, 1980s, and 1990s — but all simultaneously

The world faces big inflation in costs reminiscent of the oil shock of the 1970s.

 Like the 1980s, mounting payments arrears will be a feature of emerging markets. This will start with Russia and Ukraine, albeit for different reasons. Increasingly, Russia will be both unwilling and unable to pay western bond creditors, banks and suppliers.

 Like the 1990s, when a surge in market yields caught many by surprise, we should also expect more financial market volatility. Investors are slowly recognising that the “buy-the-dip” strategy for investing has been undermined. That approach had proved very profitable when supported by massive and predictable injections of liquidity by central banks. 

Mohamed A. El-Erian FT 15 March 2022

https://www.ft.com/content/db9e3706-84dd-47bc-a943-90d7dfef6abe