Tag Archives: financial crisis

To most people, a depression means '30s-style conditions, and since they don't see that, they can't imagine a depression. That's because they know what the last depression was like, but they don't know what one is. It's hard to visualize something you don't understand...Nobody can predict with absolute certainty what this depression will be like...[but one] can be fairly well-assured it won't be an instant replay of the last one...To define the likely differences between this depres­sion and the last one, it's helpful to compare the situa­tion today to that in the early 1930s. The results aren't very reassuring.

Soon the problems in the world economy are likely to resume with a vengeance leading rapidly falling asset markets and currencies. Gold and silver will move up very strongly. The lucky few who can afford some physical gold will weather the storm better financially - but no one will escape the suffering that will hit the world in coming years.

About a month ago, I warned of an emerging “liquidity squeeze“, and now analysts all over the financial industry are talking about it. Could it be possible that the next great financial crisis is right around the corner?

Global financial crises tend to happen in seven-year periods, and there is mounting evidence that the market is approaching another lead by the emerging markets. The above comments, and those below, have been edited by Lorimer Wilson, editor of munKNEE.com (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (see sample here – register here) for the …

Canadian households are heavily leveraged and with their level of debt in proportion to income now hovering at record levels, they are vulnerable to a range of economic shocks that could create a financial crisis. I am of the opinion, however, that the range of variables at play discussed in this article would mitigate any possibility of a meltdown of Canada's financial system. Let me explain.

For a host of disparate reasons – ranging from geopolitical tensions and currency wars to gargantuan unpayable debt and other macro-economic fundamentals – we believe the entire interconnected global economic, financial and monetary systems to be extremely fragile. Check out this time-honored function of protecting wealth.

According to a new study from the IMF, correlations in general are much more elevated these days than they were before the financial crisis. In other words, there are fewer places to hide in the markets when the markets start tanking. Check out their Global Financial Stability Report that's been described as "not for the faint-hearted." and the red bars in the chart below.

Just because something has happened in the past does not mean that it will happen in the future but the fact that so many red flags are appearing all at once has got to give any rational person reason for concern. What red flags, you ask? Read on!

The frequency of financial crises and recessions is quite high: on average, there is one crisis every 58 months (using data from the US National Bureau of Economic Research). In other words, statistically speaking, we should expect the beginning of the next crisis in April 2015, which would end by March 2016. There are 8 possible scenarios that could cause the next crisis. Let's take a look at each.

So much analysis we see and hear lately is concerned with whether the stock market is in a bubble or not. The truth of the matter, however, is that bear markets do not begin due to bubble-level valuations being reached and then bursting, but in anticipation of half a dozen mitigating factors as outlined in this article.