By Amber William
The economic crisis is here. The second financial bubble is going to soon burst, and there’s nothing anyone can do about it. The Federal Reserve has set up the American economy for financial collapse for printing trillions of dollars back in 2008 and 2009.
The Federal Reserve’s policies of printing trillions of dollars back in ’08-09 have locked into place a serious financial crisis at some point in our future. Going so far as to intimate the financial collapse and market crash will occur at least some time in the next two years, “It’s unavoidable, and even Donald Trump can’t stop it.
Top economists predict that within the next 18-24 months, the imminent economic collapse will happen. The Federal Reserve has set up the American economy for financial collapse and market crash for printing trillions of dollars back in 2008 and 2009.
The Federal Reserve’s policies of printing trillions of dollars back in ’08-09 have locked into place a serious financial crisis….Robert Kiyosaki – The Next Financial Crash Will be Like an “Avalanche”
I have been studying markets and long term macroeconomic trends as both a hobby and a work related venture for quite a few years now. As an employee of the railroad industry, our traffic levels are heavily affected by market downturns. I can personally describe the effects of the 2008 market crash when traffic levels fell drastically enough to put me out of work. Whenever a market downturn begins, the railroads are one of the first industries to suffer, and the effects last longer and hit harder than those seen in the consumer goods industries such as retail. Therefore, I will cite the railroad and our traffic patterns in answering your question.
What will be the cause of the next financial crash? Well, that’s simple. The cause hasn’t changed substantially since 1913 when the Federal Reserve System came into existence and fundamentally changed the American economy from a mostly free market system to a mixed economy in which members of the board of governors exercised substantial control over the money supply. Each and every meltdown from the Great Depression of the 1930s to the housing crisis in 2008 can ultimately be laid at the foot of the Federal Reserve System and its economic policy of the time. Each crash had a unique catalyst which the history books have reflected as the “cause” but the Federal Reserve and its monetary policy have always created the market conditions which start the catalyst moving.
In an attempt to keep this response short and concise, I wont dig too deep into the history of the Federal Reserve or why it was created. Just know that the Fed was created in 1913 under questionable legislative and constitutional conditions. The Fed serves as a lender of last resort, allowing the federal government to create literally endless sums of money, passing the inflation on to the taxpayer as a hidden and “stealth” inflation tax. The Fed regulates the interest rates throughout the broader economy by adjusting the “discount rate,” or the fund rate that the federal government pays interest back to the Fed. When the Fed lowers the fund rate, the result is ultimately lower interest rates on the consumers. When the Fed raises the fund rate, the opposite is the result. See in the following table the historical Fed interest rate policy from the 1970s to the present.
The impending economic collapse is hidden from most. People only see a rising stock market, not the negative underlying factors that will cause the whole system to crash.
The only other times in our history when stock prices have been this high relative to earnings, a horrifying stock market crash and economic collapse has always followed. Will things be different for us this time? We shall see, but without a doubt this is what a pre-crash market looks like. This current bubble has been based on irrational euphoria that has been fueled by relentless central bank intervention, but now global central banks are removing the artificial life support in unison. Meanwhile, the real economy continues to stumble along very unevenly. This is the longest that the U.S. has ever gone without a year in which the economy grew by at least 3 percent, and many believe that the next recession is very close and economic collapse imminent. Stock prices cannot stay completely disconnected from economic reality forever, and once the bubble bursts the pain is going to be unlike anything that we have ever seen before.
If you think that these ridiculously absurd stock prices are sustainable, there is something that I would like for you to consider. The only times in our history when the cyclically-adjusted return on stocks has been lower, a nightmarish economic collapse and stock market crash happened soon thereafter… There are more market crash inducing bubbles waiting to burst than ever before in the history of US markets. The most obvious is the artificial manipulation of the stock market via quantitative easing. QE has manipulated the US stock market higher since 2009.
But now, central banks have painted themselves into a corner. Bubbles are artificially created and cannot be gently deflated. They eventually burst. A stock market crash is the inevitable result.
Peter is a Real Estate Broker at Professional Brokers Group (License No. 023000), covering the greater Short Sale area of Colorado.
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Peter Janisch specializes in short sales in Short Sale Realtor. I am your Short Sale Realtor Short Sale Specialist Realtor and Short Sale Realtor loan modification and distressed property expert. This article and content is for general informational purposes and may not be accurate. This should not be taken as legal advice, technical or tax advice under any circumstance. Seek legal advise and representation in all legal matters.