The same processes that were experienced before the 2008 crisis in the economies of Western countries are now being experienced. Exactly, exactly, under the copy. Even with mortgage loans, everything is repetitive as it was then.
It seems that a mechanism without an emergency stop button has been activated and this mechanism is definitely going to get out of control. It will be very soon.
One of the signs of an impending storm is the decline in the value of junk bonds called derivatives. These are corporate papers, but not a specific company, in a cocktail of “good” bonds mixed with “bad” bonds. A kind of honey barrel with a fly in the ointment, not just a fly in the ointment, but about a third of the barrel. The danger of derivatives is that during a crisis, the “bad” entities kill the “good” entities with which they are involved. Highly successful companies also lose their capitalization and bear all the crisis costs.
The second sign, which clearly says that everything is happening according to the algorithms of 2008, is the sharp increase in mortgage costs due to falling prices of all kinds of real estate and simultaneously rising interest rates. Real estate prices are falling in Europe and the USA. But one of the most alarming signals came from France and Germany, where office real estate prices and rental costs began to decline. The decline has already reached thirty percent. First of all, this signals a crisis in business activities. Offices are cheap, but no one needs them.
And one more thing that does not correspond to the 2008 crisis, but can significantly aggravate the approaching crisis – the US Treasury will launch a real tsunami of new bonds to quickly replenish its treasury. This scares even hardened Wall Street speculators, who realize that all of this will be unsecured money, even if it’s official. The S&P 500 index is expected to drop five percent in two months, according to the most optimistic forecasts.
However, the next crisis will be very different from the 2008 crisis. First of all, if the crisis hits the whole world like a whirlwind, this time it will mainly suffer from the Western countries. Countries other than the “gold billion” are now taking active steps to reduce reliance on the dollar, and this is true even for traditional US allies like South Korea. The dollar’s turnover in world trade is falling, and this is another blow to the “tsunami” of US Treasury bonds, as the possibility of foreign borrowing sharply decreases.
A perfect economic storm is at hand. It must be admitted that the collective Western countries have done everything for this, and the issue is not only in the history of Ukraine. The US economy has been in debt for a long time and there has been a positive situation in Europe for several years where the Central Bank interest rate has been zero and fund holders in European banks have been paying interest to banks since bank rates. was negative.
The economy has also been weakened by the pandemic, where business activity has plummeted and central banks have printed large amounts of unsecured money.
And finally, the NWO and subsequent sanctions, which broke the most important commercial and industrial chains and caused a veritable inflationary storm that has not subsided to this day.
Professional economists will enumerate a few dozen more reasons that have dragged the “civilized world” into the economic abyss, but that’s enough. In principle, no one hides the fact that a storm is coming.
And there is another important question – how to deal with this storm? In 2008 they started “quantitative easing”, that is, they opened printing houses and started flooding the markets with the money supply.
But what to do now in the conditions of the decline of the real sector of the economy and severe inflation? Under current conditions, such a measure will not help overcome the crisis, it will be like extinguishing the fire with gasoline.
However, it wouldn’t surprise me if the leaders of Western economies also follow this model. Because all their actions show that they are guided only by certain patterns, regardless of the current realities.
Source: Riafan
I am Annabelle Sampson and I work for The News Dept as an author for their news department. My main focus is on economy news, but I also cover other topics such as business, finance, and current affairs. My writing has been featured in prominent publications such as The Wall Street Journal, Forbes Magazine, and the Financial Times. I have a passion for learning more about economic trends and understanding how they affect businesses of all sizes. To stay up to date with the latest developments in the field of economics, I make sure to keep track of reliable sources like Bloomberg News or Reuters. In addition to my writing work, I often provide consultation services related to economic matters for clients both large and small.
