If you grasp all that, you have to control the sense of annoyance that, once again, the markets are acting irrationally; stupidly, even. Recall that great phrase to describe the markets' grouchy response to the known likelihood, back in 2013, that the US central bank would reduce its huge purchases of bonds - the 'taper tantrum'. Once more, markets are having a tantrum. Nothing unexpected is actually happening. Everyone knows China's growth has to slow and that US interest rates need to rise. Yet because - at worst - there is an unfortunate juxtaposition of the two together, then markets see fit to throw their toys out of the pram.
Let's not anthropomorphise the markets too much, nor take the metaphor too far. Still, it is tempting to ask this: if the toddler shows patterns of bad behaviour over a lengthy period, are there underlying factors at work?
Here's one possibility. Paul Krugman, the Nobel Prize-winning economist whose op-ed pieces for The New York Times are always worth reading, reminds us that the global savings glut shows no sign of ebbing away. The savings glut started out as the 'left-field' explanation for the US sub-prime housing crisis - the notion that excess savings, chiefly originating from China and the Opec countries, inflated US house prices to the point where all they could do was burst.
The perverse effects of lop-sided saving appeared elsewhere. Since the launch of the euro, Germany's current-account surplus - now the world's biggest - almost spookily mirrors the balance-of-payments deficit of the so-called 'Pigs' (Portugal, Italy, Greece and Spain). Thus the unspent product of Teutonic thrift and application helped fund Club Med's extended extravagance and thus prompted the euro crisis. True, Germany's excess euros did not go straight to the Med countries. But a nation's trade surplus means it is exporting capital and - to the extent that money is fungible - one country's exported capital must fund the borrowing in another; and, as we know, the governments of Greece and Italy were enthusiastic borrowers at interest rates so low they could not believe their luck.
If a savings glut indicates that the globe has too much hot money chasing too few investment opportunities (the US dollar is the latest to feel the heat), it also points towards another underlying factor that both explains why the savings glut became so excessive and why it will restrict opportunities in the future. That factor is the greying of the world's population.
As people get older - especially if they are affluent - they save more. They may not save enough - that's another matter - and the saving may be compulsory as well as voluntary. But the point is, they save more. That means surplus capital chases opportunity, which should be good. It should lower the hurdle rate over which capital projects must jump to be profitable. If more projects are likely to be profitable, more should be completed. That adds to a nation's productivity, boosting corporate profits and real wages.
In China, where interest rates were - and are - artificially depressed, something like that scenario explains the investment-led boom in infrastructural spending that powered the domestic side of the country's amazing growth since the early 1990s. But in much of the developed world - which has ageing yet functioning infrastructure - excess saving has led to speculative bubbles as much as to profitable investment.
The reason for this is harder to fathom, but it may be that in greying societies there is simply not enough demand for the goods that new plants can produce better and cheaper. Alternatively, growing demand - such as there is - may be too focused on goods and services that are provided by, or heavily subsidised by, the state (for which read 'healthcare'). Simultaneously, the young would respond to the opportunity that cheap capital brings - both as innovators and consumers. Yet they are too disadvantaged by built-in constraints - especially inflexible labour markets - or not sufficiently numerous to be effective.
If the reasons are obscure, the effects are clearer - greying nations struggle to produce growth. Where Japan has led, the rest of the developed world is following. Yet the bigger concern may be the pace at which China is going grey. There has long been the epithet: 'China will get old before it gets rich', but it won't be fun if it comes to pass.
True, in the long run this excess capital searching for a quick buck will disappear as the old exhaust their savings. But the baby boomers are still partying and this is yet to happen. When it does, it will create a new set of problems revolving around capital shortages and high interest rates. That may constrain growth even more. It would also mean asset values fall for a good reason, and that might make today's anxieties almost seem like the good times.
