Start Saving Up Your Money! Next financial crisis 'has begun and will be worse than 2008 crash'

[General Asad]

Economists who predicted the 2008 global meltdown say the world economy is in danger once again.

The beginnings of another financial crisis are already in motion - and it will be worse than the global meltdown of 2008.

That's the opinion of one of the select band of economists who predicted the 2008 economic collapse, which started with the bankruptcy of Lehman Brothers bank a decade ago and ended up affecting every country in the world.

Ann Pettifor predicted that crisis in 2006, more than two years before it actually struck. Now she thinks the global economy is in danger once more thanks to huge corporate debt, and the prospect of rising interest rates in the United States.

Global debt is now more than three times the level of global GDP. "So naturally it is not going to be repaid, and naturally there is going to come a point when that debt triggers the next crisis. And, for me, that trigger is going to be high rates of interest," she said.

"We're seeing that companies who borrowed too much money at very low rates of interest are now finding the value of their collateral falling. Their debt is rising and the interest on that debt is rising too."

What's more, she thinks the process has already started.

She said the US Federal Reserve's decision to wind back its support for the economy, and reverse its programme of quantitative easing, has already laid the ground for the next crisis. "In Argentina and Turkey, they are already facing a crisis as a result of the Fed's decision to diffuse the bomb that is QE, and to increase interest rates," she said. "Those decisions have both served to strengthen the dollar, which has hurt their economies."

She said: "I think it will be worse than the last crisis because we don't have the tools. It will be really difficult to start pumping out quantitative easing, buying back all those assets.

Her warning is echoed by others. In an exclusive interview, Tom Russo, former managing director of Lehman Brothers said "the seeds of the next crisis are probably already being watered right now".

He puts the blame on leverage, a measure of corporate debt. "I think it's probably going to be the same fundamental issue of leverage that we had 10 years ago," he said. "We keep on promising things to people without the means to pay for it. It will just become harder and harder to deal with it."

Stuart Plesser, a senior director at the rating agency Standard & Poor's, is one of the most respected banking analysts in America. He said: "There are single B [a low credit rating] companies who are borrowing a lot of money, because rates are low.

"They have borrowed pretty significantly and so, if they don't have a really viable business, or business is impacted by something in the economy, or if rates go up, then the concern is this - can these companies, that have borrowed so much, really have the werewithal to pay back the debt they took on?"

https://news.sky.com/story/next-fin...orse-than-2008-crash-economists-warn-11497433

 

[Basra]

I do not think so. There will be normal inflation & deflation, here & there, and maybe a little recession, but i think we are good going forward. And that is even if we go into a war, we will hit a brief recession, and everything will be dandy!

2008 financial disaster was something unique and not repeating again. Period. We r better for it & learning from it

 

[Tukraq]

Not even possible we haven’t even got a China deal yet, trump can boost the economy every week by just saying “something big is happening between China and were near a deal”, boom economy goes back up with his tweets

 

[General Asad]

I do not think so. There will be normal inflation & deflation, here & there, and maybe a little recession, but i think we are good going forward. And that is even if we go into a war, we will hit a brief recession, and everything will dandy!

2008 financial disaster was something unique and not repeating again. Period. We r better for it & learning from it

We have had a 10 year recession since the 70s. We are overdue for one anyways. https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

 

[Basra]

We have had a 10 year recession since the 70s. We are overdue for one anyways. https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

How many wars have we been in since 70s? Many


Obama changed the "dumb war" policy for US

 

[repo]

What's the date?

 

[General Asad]

Not even possible we haven’t even got a China deal yet, trump can boost the economy every week by just saying “something big is happening between China and were near a deal”, boom economy goes back up with his tweets

Basic economy 101: Bubble is created, bubble grows, bubble pops.

Rather than living paycheck to paycheck (Most Americans are), start saving up money and venturing into stocks, real estate etc because when it does hit, the rich will be taken care of by the banks and the rest of society will be left with nothing. Better to be safe than sorry.

 

[General Asad]

What's the date?

Got any money saved up? Got any stocks? Its over due but it will happen in the near future

 

[General Asad]

How the rich benefit in a recession
Paul Krugman has a Nobel Prize in economics. I don’t. He writes for a wide audience in The New York Times. I write for a more select one in The Triangle. But I think I have something to tell Professor Krugman, because it seems to me that he is struggling to understand what should be quite obvious.

In a recent article, “Rock bottom economics,” Krugman confessed to a great puzzlement. The means to stimulate the economy, which continues to “perform” (to use a term economists have apparently borrowed from either the circus ring or a sex manual) at the so-called pre-recession level, are readily at hand.

The Federal Government needs to inject more money into the economy, since it alone can supply both capital and demand. The Federal Reserve Bank needs to raise interest rates, which at the 0.25 percent they have sat at for six years constitutes a liquidity trap, in sync with this. Hey presto: Happy days will be here again.

Krugman doesn’t understand why this hasn’t happened. Virtually all economists, he assures us, agree with his prescription; it is not only orthodox doctrine but it’s real-world tested. It works. It got us out of the Great Depression, and over assorted other bumps since. So, what’s the hang-up?

Krugman thinks economic policymakers and others whom he calls “Very Serious People” have been overly preoccupied with the fear of sparking inflation and reigniting the public debt. As he points out, though, inflation is a manageable concomitant of growth, and deflation — which Europe’s economy as a whole now teeters on — is much worse.

Even if America’s economy skirts that trap, approaching it, like dancing on the edge of a black hole, throttles any hope of a robust recovery. Jobs at best limp back; wages stagnate or decline. And both remain perilously vulnerable.

The point Krugman misses, however, is that the “Very Serious People” aren’t blinkered by their devotion to the memory of Herbert Hoover. They know exactly what they are doing, and why, and for whom. For Krugman, jobs are the number one priority in a recovery, because jobs create demand and demand fuels prosperity.

But a broad-based recovery is not, in fact, to everyone’s maximum advantage. Depression economics can be very, very good for some people, provided it’s rigged the right way. Those people are the rich.

Consider what happens under conditions of full-employment prosperity. Wages rise, because labor is at a premium. So do demands for job benefits and security. Profits rise, too, but they are cramped by inelastic labor costs. One solution for this is outsourcing, which is greatly facilitated by globalization.

Imperialism pioneered this practice; multinational corporations, the successors of empires have perfected it. Another solution, however, is to lower domestic labor costs by making jobs scarce. The way to do this is through what are now called recessions.

These are sometimes planned, as was the 1969 Nixon recession (whose goal was as much political as economic). Most often, they are the consequence of bubbles, as was the case in the crash of 2008.

Mild and short-term recessions don’t amount to much more than a haircut for labor, however painful they may be for those affected by them. To bring wages down for a satisfactory period if not indeed for good, you need something deep and sustained, a full-blown depression.

The United States entered such a depression six years ago. It has been deliberately prolonged with the objective of reducing compensation levels across the board in the manufacturing and service sectors. At the same time, productivity demands have been ratcheted up, most obviously in an ever-lengthening workweek, while job security has virtually disappeared except as a temporary bargaining chip to reduce wages and cut benefits even further.

Pensions, in particular, whose benefits once seemed secure, have been scuttled by strategic private sector bankruptcies, in which states and municipalities have now joined.

None of this could be achieved without a good long bout of hard times, and that is exactly what those at the controls of the American economy have given us. The result was graphically suggested by the recent story in Krugman’s own New York Times of a 49-year-old manufacturing worker who had been earning $18.50 an hour.

That seems like a fairly decent wage, until you reflect that a fast-food worker in Copenhagen earns $20 an hour — the minimum wage in Denmark, and what would be the minimum wage in the U.S. had wages kept pace with labor productivity in the last four decades.

Our worker lost his job, and with it the modest standard of living it had supported. Many such people, if they could get work at all in the past few years, have taken service jobs paying half what manufacturing employment once did.

But, as you may have heard, factory jobs, after decades of disastrous decline, have made a slight comeback of late. Our worker was able to get the equivalent of his old job back — except that it now paid $10.50 an hour. Instead of slinging hash, it’s ingots again for him. The problem is, the wages are still hash.

Depressions have other notable benefits, provided that interest rates are kept low enough for favored customers. Property can be bought for a song, as housing and real estate values plummet. This is called recapitalization. Monopolies form as merger rules are relaxed. Banks and businesses borrow at virtually zero rates from the friendly Fed, while charging premium rates to others and living off the spread without having to add a smidgen of value.

All of this, we’re told, staves off the dragon of inflation. Indeed it does, while facilitating an ever greater transfer of wealth from have-nots to haves. That is why the degree of economic inequality — and, as Colonel Jessep would say, is there any other kind? — has grown steadily during the Obama years.

The rich are making more, lots and lots more; corporate and financial profits are at record highs; international markets are again awash in excess capital. And almost everyone else is making less.

Paul Krugman can’t figure out why hireling bureaucrats and think tank operatives would want to succor the rich at the expense of the rest of us. Learned ignorance can be a contagious thing. And, though Krugman is, I have no doubt, a man of high and serious purpose, he’s probably making out pretty well himself.

 

[repo]

Got any money saved up? Got any stocks? Its over due but it will happen in the near future

I ain't got shit.

 

[General Asad]

I ain't got shit.

Welfare and ceydh will be not be an option in a recession. Move out your hooyo's basement and make strides to try to get something in that empty bank account before shit hits the fan

Got any rich people in your family who are fine with having a man live in their basement for a bit? Waay kuu dhamatay

 

[CaliTedesse]

WHen do you think a recession will hit us what year

 

[Abdi Caato]

Mashallah time to venture into the real estate market very soon kkkk

 

[Tukraq]

Basic economy 101: Bubble is created, bubble grows, bubble pops.

Rather than living paycheck to paycheck (Most Americans are), start saving up money and venturing into stocks, real estate etc because when it does hit, the rich will be taken care of by the banks and the rest of society will be left with nothing. Better to be safe than sorry.

Well then you need to go back to Econ class as the bubble won’t pop before China gets resolved simple as that

 

[KobeBryant]

Mashallah time to venture into the real estate market very soon kkkk

Yea that what I was thinking. Economy goes up and down. Right now save money. And buy real estate when the recession occurs

 

[GBTarmy]

this has been talked about this whole year

 

[Basra]

Basra got her futo covered! Rich Baby Daddies

 

[VantaBlack]

This is exactly why the modern economic model is not feasible indefinitely.

When it does crash, the rich want to go under ground while everyone else basically devour each other.

But I think it will go into a new world of prosperity. It will basically backfire on the so called rich who have been manipulating everyone for the past few hundred years.

 

[Exodus]

Inshallah

 

[Tukraq]

10 year bull will keep going strong