Nouriel Roubini / ZeroHedge
Although the global economy has been undergoing a sustained period of synchronized growth, it will inevitably lose steam as unsustainable fiscal policies in the US start to phase out. Come 2020, the stage will be set for another downturn – and, unlike in 2008, governments will lack the policy tools to manage it.
As we mark the decennial of the collapse of Lehman Brothers, there are still ongoing debates about the causes and consequences of the financial crisis, and whether the lessons needed to prepare for the next one have been absorbed. But looking ahead, the more relevant question is what actually will trigger the next global recession and crisis, and when.
The current global expansion will likely continue into next year, given that the US is running large fiscal deficits, China is pursuing loose fiscal and credit policies, and Europe remains on a recovery path. But by 2020, the conditions will be ripe for a financial crisis, followed by a global recession.
There are 10 reasons for this.
In a speech delivered Tuesday in Paris, billionaire investor George Soros warned that the world could be on the brink of another devastating financial crisis, as debt crises reemerge in Europe and a strengthening dollar pressures both the US’s emerging- and developed-market rivals.
And Europe, with Italy dragging worries about the possible dissolution of the euro back to the forefront, won’t be far behind. Political pressures like the dissolution of its transatlantic alliance with the US will eventually translate into economic harm. Presently, Europe is facing three pressing problems: The refugee crisis, the austerity policy that has hindered Europe’s economic development, and territorial disintegration – not only Brexit, but the threat that countries like Italy might follow suit
On May 11, 1998, at a formal ceremony, Economy Minister Dominique Strauss-Kahn activated the mint printing press and produced its first euro coin, making France the first of 11 nations participating in the launch of the single currency to strike the money. Taking a bite out of the coin, Strauss-Kahan declared that it’s “the real thing, it’s no copy.”
At the time, the Monnaie de Paris was scheduled to mint 7.6 billion coins, or four times the weight of the Eiffel Tower, and eight different coinage denominations with a value between 0.01 and two euros. The coins maintained one national side and one European side.
Proponents scoffed at the naysayers, declaring that it would stimulate the economy and spur industrial growth that can rival that of the U.S. and Japan…lees verder
And as GoldTelegraph’s Virginia Fidler recently noted, as socialist utopia Venezuela hits bottom, the latest culprit is oil.
But oil prices have been rising since the fourth quarter of 2017, and Venezuela’s economy has only gotten worse. These higher prices should be a boom for Venezuela by creating greater revenues. Instead, its oil industry is in shambles and decline…lees verder