Markets Worry of A New Financial Crisis in 2019
Stock’s Hit Hard Causing Fears
Over the last few years, we’ve seen stocks continue to rise, it is true that some stocks rose upwards of $17, $18 trillion.
In turn it has created quite a buzz among the wealthy which has caused the hunger of pure greed to follow. People can not get enough it would seem.
On the flip side of that however is what is commonly referred to as the market doom and gloom predictions and some are already predicting a brand new financial crisis, just in time to ring in a new year.
The reality:
Overall, stocks are down 1.5 percent this year, after hitting phenomenal heights in early October.
Hedge funds are having their worst year since the 2008 crisis.
Household debt recently hit another record high of $13.5 trillion which is up $837 billion from the previous peak
And all of that happens be a mirror image of what preceded the Great Recession.
Massive run-up in stocks, real estate and other assets have fueled a decade of low interest rates.
76 year old Jim Rogers, the influential fund manager and commentator, has forewarned of a crash that will be “the biggest in my lifetime.”
Currently the mountain of student debt is in reality just a $1.5 trillion bet that a generation of underemployed young people will ever be able pay off a hundred grand in tuition loans in an economy where even hedge funders can’t seem to afford the cost of living.
Just back in 2008, it was the housing market that was faced with the very same type of delima.
At present a lot of former students simply are not paying back the loans, more often than not, simply because they can’t pay.
By comparison to 2008 these are massive amounts of unaffordable loans being made to people who can’t pay them, who may ever be able to pay them back.
Quite a bit of that debt is owed to the Federal Government by the way which is not going to hit banks like the crash in 2008 however, the current burden of debt is already beginning to wipe out the next generation of home buyers and auto purchasers.
Ever since the Federal Reserve started printing money in the name of “quantitative easing” to pull us out of the last financial crisis, money has been cheap, and seemingly any American who can prove just a couple of weeks worth of employment can obtain a credit line and has been able to fake “rich” by spending it like its water.
Currently, that system is now running in reverse. Ouch!
As a result, the Fed has been hiking rates and spooking markets in order to stave off inflation and other potential ills.
China out of any nation worldwide has the worst debt, ever. In China they dumped cash into what they dreamt would be world class working cities, homes, factories, shopping centers and the like, now all sit as ghost towns lying in waste and utter ruin.
Add to that the country also more than doubled its population to roughly 1.4 billion people.
If the China debt-bomb gets pricked by a pin, it will affect the entire world because China’s debt is a ticking time bomb that will explode eventually and that fallout is worldwide with nowhere to hide. It is not a matter of if, but when.
Some are speculating that Brexit, well that could cause all sorts of countries just up and leaving the European Union which in turn could affect the world markets.
Will the markets crash in 2019 or not?
No one knows for sure really, one thing is for certain, those deep within the financial industry are already bracing themselves and planning for a potential crash in the coming new year.
Cristal M Clark
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