Looks Like Big Economic Trouble Is Coming In 2018 - Here's Why - munKNEE.com
Friday , 27 November 2020

Looks Like Big Economic Trouble Is Coming In 2018 – Here’s Why

…According to one of the most reliable indicators that we have, we areeconomy-financial-black-hol closer to another recession than we have been at any point since the last financial crisis and, when you combine this with all of the other indicators that are screaming that a new crisis is on the horizon, a very troubling picture emerges.  Hopefully this will turn out to be a false alarm, but it is looking more and more like big economic trouble is coming in 2018.

The original article, written by Michael Snyder, is presented here by munKNEE.com – “ The internet’s most unique site for financial articles! (Here’s why)” – in an edited ([ ]) and revised (…) format to provide a fast & easy read. Visit our Facebook page for all the latest – and best – financial articles!

The professionals on Wall Street take the yield curve very, very seriously, and the fact that it has gotten so flat has many of them extremely concerned. If the yield curve continues to get even flatter, it will spark widespread selling on Wall Street and, if it actually inverts, that will set off total panic.

…When the financial markets finally do crash, it won’t exactly be a surprise. In fact, we are way, way overdue for financial disaster.

  • Since the last financial crisis, we have been on the greatest debt binge in human history.
    • U.S. government debt has gone from $10 trillion to $20 trillion,
    • corporate debt has doubled,
    • and U.S. consumer debt has now risen to nearly $13 trillion.

Debt brings consumption from the future into the present, increasing short-term economic activity at the expense of long-term financial health, but we simply cannot continue to grow debt much, much faster than the overall economy is growing…The only reason why we have even gotten this far is because unprecedented intervention by the Federal Reserve and other global central banks has pushed interest rates way below the real rate of inflation, and that has bought us extra time.

Indeed, if the average rate of interest on U.S. government debt were to return to the long-term average, we would be paying more than a trillion dollars a year in interest on the national debt and the game would be over but now the Federal Reserve and other global central banks are reversing course in unison, and global financial markets are already starting to decline. Of course more debt and more central bank manipulation would just make the eventual financial disaster even worse, but that is what we are faced with at this point.

The only way we can keep putting off the next financial crisis is if we continue our unprecedented debt binge and if global central banks continue to artificially prop up the financial markets.

Most people simply don’t understand the gravity of the situation.  Nothing was ever fixed after the last financial crisis.  Instead, we went on the greatest debt binge that humanity has ever seen, and central banks started creating trillions of dollars out of thin air and recklessly injected that hot money into the financial system so now we are in the terminal phase of the largest financial bubble in human history, and there is no easy way out. We basically have two choices. 

  1. We can have a horrific financial crisis now,
  2. or we can have one a little bit later.

Usually the choice is “later” – and that is why our leaders have been piling on the debt and global central banks have been recklessly creating money. It is inevitable, however, that our bad choices will catch up with us eventually, and when that happens the pain that we are going to experience is going to be absolutely off the charts.

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