The world is heading toward a financial crisis – the state of US politics has left us ill-prepared

‘We stare into an unprecedented future, one in which a financial crisis like the world has never seen invites the most self-defeating government response ever.’ Illustration: Guardian Design / Getty Images

A bona fide financial crisis has not broken out since the US housing meltdown of 2007. Even the Covid pandemic and subsequent upsurge in inflation didn’t lead to financial upheaval. The jitters produced by the collapse of Silicon Valley Bank in 2023 were soon forgotten.

Given this stability, it might take some effort to convince financial markets that another big one is around the corner. But it is. Financial markets and their regulating governments may believe they have acquired immunity, but the world is careening toward a moment of financial upheaval that could well dwarf the damage caused by the last one.