Global economic expansions do not die of old age. Outside war or violent energy shocks, they are invariably murdered by central banks fearing inflation.

The fact that the post-Lehman business cycle in the US is already the third longest since the mid-19th century tells us little. The more relevant point is that consumer price growth has been falling relentlessly this year and has dropped to 1.4 per cent.

The US future inflation gauge published by the Economic Cycle Research Institute has also rolled over, and this underlying indicator suggests that it will stay low for a long time. The US has turned Japanese.

Goldilocks growth might well continue for another two years or more, even though the cyclically adjusted price to earnings ratio of Wall Street equities has reached a vertiginous 30.12.

This stock market metric is higher than in mid-2008 and is exactly where it was before the great crash in October 1929. These are disturbing thoughts. Yet it takes a catalyst to trigger such events.

Central banks are currently so frightened of market tantrums that they are treading with extreme care. The recent brief moment of resolve has already passed. The US Federal Reserve and the European Central Bank are rowing back.

"Calling business cycle tops is like playing a slot machine. To win the forecast jackpot you need three 'macro' cherries to drop at the same time," say Kevin Gaynor from Nomura.

None are yet in place. The output gaps in advanced economies have closed but are still far short of previous peaks. It may take another twelve months to get there.

Icarus trade can go on a bit longer

Nomura's gauge of investor exuberance is "flashing amber" but nothing worse. What is really missing is accelerating inflation. "This cherry is not yet anywhere near amber or red, and it ain't over until the last cherry drops," he said.

Michael Hartnett from the Bank of America fears the denouement may come sooner but it is not imminent. Janet Yellen, of the Fed, bought more time by "blinking" in congressional testimony earlier this month.

"The Icarus trade can continue for a little while longer. The signals for a big top in risk assets are still not visible," he said.

Plenty of money remains on the sidelines. Investors have 5 per cent in cash. The sell-signal is not triggered until the ratio drops below 3.5 per cent. The bank's "Bull & Bear Indicator" of greed is the highest in three years but not yet extreme.

Calling business cycle tops is like playing a slot machine.To win the forecast jackpot you need three 'macro' cherries to drop at the same time.

Kevin Gaynor, Nomura

Whether Mrs Yellen really blinked is a cardinal question. She let slip that interest rates are already close to the neutral rate. This effectively reeled back the pace of monetary tightening. It was a concession that the Fed may have over-estimated inflationary pressures due to its reliance on the outdated Phillip's Curve model.

The current cycle is in any case unique. It is stretched longer because it has been so weak. The double-dip recession in the eurozone - caused by premature austerity - sent tremors through the whole global economy in 2012. It delayed the closure of output gaps. It led to deflation.

The Chinese recession in early 2105 - never acknowledged - led to a second dampening effect. Commodity prices crashed. Brazil and Russia slid deeper into slumps. The world has seen rolling regional recessions. These have been letting off steam intermittently.

There was a fresh mini-scare earlier this year when both the US and China slowed abruptly, in China's case because Beijing hit the brakes again, and in America because Trumpian stimulus fizzled.

That soft patch did not reach the point where it tipped into recession - though it could have - and ultimately allowed the US economy to catch its breath. It has stretched the cycle once again.

Mind the bear traps

The forward-looking indicators are turning up. The coming surprise may be how strong the US economy proves to be by early 2018. The dollar may yet rocket.

There are bear traps all over the place of course. The Washington Post reports that Steve Mnuchin, the neophyte US Treasury Secretary, is "hurtling towards his first fiasco": a federal government shutdown when the money runs out in September. The country will default if the debt ceiling is not raised in October.

Bank of America says a dangerous game of chicken is developing. Hard-line Republicans in the House Freedom Caucus want to use these deadlines as a lever to force draconian spending cuts, claiming that the country is "drowning in debt".

President Donald Trump himself tweeted two months ago that: "Our country needs a good shutdown to fix mess."

Yet political risks cut two ways. Adam Posen from the Peterson Institute says the healthcare fiasco on Capitol Hill does not mean that Mr Trump's tax plan will fail as well.

The Republicans now need an easy win, and nothing is easier than cutting taxes and dressing it up as fiscally neutral through "dynamic scoring".

Disasters need time to play out

If corporation tax drops to 25 per cent and incentives are offered to repatriate up to $US4 trillion of US corporate cash held offshore - tinder for stock buy-backs - you might see the sharemarket's price earnings ratio breaking the all-time high of the dotcom boom.

Whether any of this stimulus is wise is another matter. The Bank for International Settlements chides central banks for making a Faustian Pact long ago, rescuing markets every time there is trouble but letting asset bubbles run unchecked in the good times.

They have created "intertemporal" imbalances that require ever lower real interest rates with each cycle. The deformity is worse today than before the Lehman crisis after eight years of emergency stimulus.

The global debt ratio is 40 percentage points higher at 327 per cent of GDP. Nobody knows what the sensitivity may be to even a modest degree of tightening.

Yet if the Sword of Damocles hangs ever over us, that does not mean it is about to fall. My humbling discovery after decades of amateur observation is that such episodes take longer to play out than you imagine.

I was convinced that the global financial system was spiralling into crisis at least 18 months before Fannie Mae, Freddie Mac, and Lehman Brothers collapsed over those terrifying weeks of late 2008.

That was a bad call. Even disasters have their proper sequencing.

The Telegraph, London