Are you ready for the next Financial Crisis?
Bill Gates: "Yes. It is hard to say when but this is a certainty." -- on Reddit's "Ask Me Anything"
Image source: Wikimedia Commons
In a recent article, Microsoft co-founder Bill Gates responded to the pertinent question: Whether U.S. would have another crisis in the near future. He answered that he was not sure when it would occur, but would definitely occur. It was reported on CNBC by Kathleen Elkins. In response to an emminent crisis, Warren Buffett also gave very good advice to investors - "Buy and Hold."
If you are still feeling questionable as to: Will the next financial crisis ever come? The answer is YES. Global financial crisis is a phenomenon that happens (almost every 10-year cycle). I apologize for not having any evidence to support that claim. What we know is that the previous financial crisis happened in 2008 when subprime mortgage and investment bank Lehman Brothers collapsed. We probably went through the crisis and suffered one way or another.
Image source: pixabay.com
How well are we protected from the next financial crisis?
Many are still skeptical about the view that Bitcoin could be "the way out" of a financial crisis. What if governmental bodies and banks have been secretly borrowing and investing in cryptocurrencies? Once the financial crisis occurs, everyone suffers. If banks go bankrupt, they might lose their crpyto assets and hence cause crypto prices to plunge.
The counter-argument about cryptocurrencies is the potential diverse financial economy we could have. In The Guardian's article, titled: "Bitcoin tools could make finance system safer, says IMF boss" by Richard Partington a couple of days ago discusses how Bitcoin and other cryptocurrencies could be where investors would flock to as the financial market crashes. Crypto-Investors have a more diversified background (US, Europe, and Asia) rather than being geographically connected.
According to the IMF report more than one – third of the worlds advanced economies carry a debt to GDP level over 85%, three times more than in 2000. At the same time, a fifth of developing markets have debt levels above 70% GDP.
Source: newsBTC - John Mcmahon
With the increasingly huge debt bubble of $164 trillion, the global financial market is just waiting to burst into flames. Investors who have a diverse portfolio should review their current situations:
- Long-term investments could tide over financial crisis periods when properly managed.
- To minimize losses, investors are reminded to have sufficient liquidity, backup reserves, i.e. that spare cash of piggy bank, to tide over years of financial crisis.
- Personal debt should be kept low in the event when job retrenchment suddenly happens, you are prepared for it.
Let's hope everyone is getting prepared, now that we have reached the 10-year mark. Will cryptocurrency be our boon or bane?
When everybody starts to think of buying Gold, a crisis is near.
-tysler
Image source: maxpixel free cc0 images
I believe Canada will trigger the next global credit crunch.
Wow the huge debt Canada is building is crazy. I wonder if Canadians are starting to feel the effects of the real-estate bubble? Banks collapsing are never a good thing for the country, since they are so tightly connected.
That's a crazy stat that most countries Debt to GDP is 3 times what it was in 2000, at 85%. $164 trillion debt bubble, this could pop in the derivatives market and the whole financial system would blow up. All that would be left is physical cash, precious metals, and bitcoin. However, you can always print more physical cash, you can't print more metals or bitcoin. I think everyone should have at least 10-20% of their net worth outside the financial system. It's bound to happen, we are sitting on an avalanche of huge debt, and we are just waiting for that last snowflake to fall and initiate the crash.
I agree too on that. It is a good suggestion for protecting ourselves against a crisis
Hi, here is an image from bbg that shows market cycles in the US -
I work in finance and my opinion too is that a recession is likely soon. Every economy is artificially pumped up. Stock are rising as credit is still cheap, employment has risen but wage growth had been been slow and inflation was rising faster than wages, so in the end everyone is feeling poorer. A great proxy for dissatisfaction during this recovery is that people are voting for trump and brexit - which doesnt mean that trump and brexit are bad - but what it means is that a lot of people are actually dissatisfied with this economic growth as benefits havent gone to nearly half the population in those countries.
The printing of money through QE and negative rates in europe were a massive experiment by central banks and people are genuinely worried that when this liquidity is withdrawn, will the economic growth be sustained, given people have actually seen a reduction in disposable incomes.
A recession will be a terrible thing, although may cause a likely inflow of capital into cryptos and cause them to rise sharply.
Wow thanks for the informative image. Yes, cycles are actually much shorter with small-to-medium sized crises happening all the time. To have sufficient liquidity and funds backed by banks in case of crisis is important, so that savings do not 'vanish' overnight.
Yes, absolutely. Which is why central banks have now forced banks to be more capitalized and cut down on proprietary trading. And then for a few early adopters, there's bitcoin.
I am not sure if the fulm image is visible, i cant see it properly on mobile. However, it shows the length of each cycle.
Roughly cycles are about 5 to 6 years long. People have been anticipating the current cycle since 2015.. and to everyone in banking and finance this cycle is overly extended thanks to easy policies by central banks worldwide. Unfortunately even the US FED is now forced to raise rates because they need some ammunition for when we actually see a recession.
Great, excellent post. Bitcoin was created because of the mistrust of Wall Street in 2009. I would invest a lot more in the crypto space, but the correlation over the last 15 months between bitcoin and the DOW concern me. I know the Markets are going to tank soon, the question is will Bitcoin follow the Markets down?
NOTE: Bitcoin candles, DOW shaded area.
Yes the more inversely correlated Bitcoin is to the Markets, the higher chances it can hedge over traditional banks. This would mean greater negative impact on huge stakeholders that are often in retirement and earning large dividends to be eliminated sooner in this game.
Hello, I am a beginner in steemit.
I read your post well. I;m also seeing bubbles now. I think the bitcoin will make a big rise when the bubble disappears.
I followed you.
I am reporting the flow to the wallet of the top 100 bit coin for you.
If you are ok now, can you read my posting?
https://steemit.com/coinkorea/@ayogom/bitcoin-whale-wallet-analysis-2018-04-19
https://steemit.com/bitcoin/@ayogom/bitcoin-whale-wallet-analysis-2018-04-18
Thank you for sharing your articles, they are very good information on where the biggest Bitcoin wallets are. I recommend others to also take a look. :)
It seems like the whole economy is in a 'bubble'. Thanks for the share and info. Everything works in cycles and it seems like we are on the edge of one. Appreciate the article @tysler.
Hi thanks for following my articles. Yes better be ready sooner than later. Always build a portfolio that is crisis-resistant and sufficiently diversified.
anyone else hop it doesn't come to soon, so we can accumulate more cryptos?
Hello @tysler Ive been viewing your post for some time now lastly just following you. I've been on here since March 2018 lastly getting into my own score myself with my substance. Continue doing what your doing! You have a fan forever.
When you copy/paste or repeatedly type the same comments you could be mistaken for a bot.
Tips to avoid being flagged
Thank You! ⚜
Great! I will continue to create quality and informative articles for Steemit members. Thanks for following
The opinion of any expert or professional, outside of his field of expertise, is no better than Joe Six-packs.
Bill Gates is an expert at stealing/buying/ capitalizing on other peoples work...he should stick to that.
wow ,readly we will face the financial crisis ..