> But what happens when marketing spend goes down (as it does in a recession)? What happens when customers aren't willing to pay as much for your advertising product (as happens in a recession)? What happens when borrowed money can't be secured easily, and debts come due (once again, as happens in a recession)?
Typically - what happens is - central banks lower interest rates until they're negative in real yields - and people start spending like crazy again.
Who knows what will happen in the future. But that's been the previous playbook.
that only works if people A) still trust the underlying currency and B) you don't create hyperinflation. What happens in the future when the global economy isn't denominated in petrodollars?
Thats because the rest of the world need US dollars to buy fuel. We and as such we have the defacto world currency. But that is changing, every years green renewable energy makes up a higher proportion world energy and we use less carbon based fuel requireing out currency less and less. Secondly we are seeing other world powers build out the infrastructure for international banking denominated in other currencies to avoid the US banking regulation and sanctions. at some point the Dollar wont have the level of utility and dominance that to allows the US to do that sort of currency manipulation without consequences.
Typically - what happens is - central banks lower interest rates until they're negative in real yields - and people start spending like crazy again.
Who knows what will happen in the future. But that's been the previous playbook.