The Next Financial Crash
The financial market is a finicky thing. One day it will be up, and the next it will be down. For the most part, these trends are small. The change isn’t significant and the market quickly corrects itself. But every now and then the financial market crashes. Goes so far below safe zones. During these times people find themselves pinching pennies and businesses hurt.
Every time one of these financial crashes happens, there are signs that act as omens. Those signs let you know what is coming. Currently, we are seeing multiple signs of the next financial crash coming soon.
Signs of The Next Financial Crash
The Dislike for The President and Government
Trust in the government and leadership always boosts a country’s financial status. When people know that the country has a strong leadership, they feel comfortable in the direction of the country and with that they feel comfortable spending. It is no secret that the majority of the country does not like President Trump and the government he has established.
The lack of trust and approval for the government spells negative consequences for the government. At first, when President Trump was elected we saw an uptake in the economy. That has already turned the other way.
Trump’s belief that he is a financial guru has lead him to make decisions without having much of an evidence-based opinion. Almost all of Trump’s businesses have seen negative outcomes. From bankruptcy to default, he hasn’t shown luck or business smarts. Now this man is leading the financial direction of the country in the same way that his businesses have.
Tariffs and Trading Laws
One of the things that has always kept America strong is its ability to have free trade. You can import and export almost any good that you wanted. Small retailers could make a living selling products like Chinese cellphones. The Trump administration has aimed to stop this. Trump has imposed international trading laws and tariffs that make doing business with foreign countries difficult. Especially specific foreign countries such as China.
All of these trading laws have not made friends around the world. China for one, has vowed to retaliate against the tariffs with their own against American goods. This will significantly hurt many businesses. With the reduced ability to trade internationally, many people will start to hurt.
High Amount of Debt
We have seen a severe reduction in the amount of unemployment, a positive step for the economy most would say. But the amount of household debt is now at over 13 trillion dollars. The last time the market started to crash, the household debt amount was at just over 9 trillion dollars. Even taking into account inflation, we are still seeing too much debt amongst the American people. With a large amount of that being in mortgage loans.
Student loans have also gone up to over 600 billion dollars. Auto loans to over 1 trillion. Corporate debt is also very high.
Finding the right balance of debt and asset value can be extremely difficult. From what the data is telling us, it doesn’t look like the country has found that balance. Debt will be one of the biggest reasons that an economic downfall will happen.
What we didn’t talk about yet in the debt section is the amount of federal debt that the US has built up. Since 2004, every year we have seen an increase in the amount of debt the country has managed to build up. Despite talk of developing a plan to combat this debt, we have yet to come up with a good way to do so. Periodic government shutdowns and cutting in only a couple of small areas is not going to do the trick.
What we don’t see is also the areas that the government doesn’t yet consider debt. Unfunded liabilities could be major problems further leading to a crash. The government doesn’t have funding for upcoming expenses such as pensions and social security. Light has been brought to this, but a solution hasn’t been found. When the government just continues to go into debt as these liabilities need to be paid out, the only possible place the economy can go is under.
Reduced Capital in The Banks
Our banks have a reduced amount of capital on hand. During previous crashes, such as those in 2008-2009, showed that banks were unable to handle the situation due to a lack of a cushion. When looking at the banks now, we see the same signs as before. The lack of capital means that banks won’t have the cushion needed to survive the crash of the financial world.
Even studies that have been performed by the federal government show that banks would not be able to support themselves. If even one bank went under, the whole US would be in major trouble. All of the major banks are not prepared for the next crisis and even measures put in place to prepare against a crisis will not be enough to protect us this time.
We very well could be looking at something worse than most, if not all, previous financial crises.
Professionals Are Predicting the Crash
Professionals from all parts of the financial industry are predicting that the market is going to go down. One of the biggest is Peter Schiff, a financial commentator, who stated that the coming crash will be worse than the great depression. It is hard enough to get people to agree in the modern world with so many different opinions being out there. If you get professionals together to agree that there is going to be a negative trend to the market, you know that something is coming.
Goldman Sachs also agrees that the US economy isn’t headed in a good direction. If you are looking for even further support, Murray Gunn is another believer in the downturn of the economy. Here are more believers in the bad state of the economy and the potential for a crash:
- Lindsey Piegza
- Morgan Stanley
- Francesco Filia
- Jeremy Grantham
- Sheila Bair
- Kenneth Rogoff
All of these people are major players and their word is trusted by many people around the world.
Prediction of the crash isn’t only limited to the professionals in the financial world. The State of Texas has also seen the upcoming financial crash. In preparation to safeguard itself, Texas has withdrawn one billion dollars in gold from the Federal Reserve Bank. A big move. A move that will help them to ensure that they have access to their gold and no one else does.
Take Advantage of The Crash
Are you ready for a financial crash? Starting to plan now can make the difference during a downswing in the economy. Preparing to invest and making strategic investments before the crash will help you to be ready for when the crash does come. It is also possible to leverage a financial crash to your benefit if you are prepared to do so.
After a financial crash happens, prices go down and everything becomes affordable again. We aren’t just talking about small ticket items. Homes and other property are one of the biggest things affected. You start to be able to afford properties and the demand for rental properties go up. People default on mortgages and need a place to live. That puts those who own investment properties in a great place. Not only do you make money before and after the crash, you have a reliable income during the crash.
You don’t have to invest during the crash to start making money. Prices start to drop before the crash and strategic investments before the crash and during the crash can help to protect your financial future.
Many of the people who successfully take advantage of financial crashes do so by working as a team. For one person to make a crash something positive, it takes a lot of work. You have to research all sorts of data and keep track of trends. Possessing a lot of capital is also a requirement. An investment group takes the work off any one person and leaves it with a group. The whole group takes on different roles and the capital is spread amongst the group.
Now, we never recommend that you go into an investment blind. Performing your own research is key. That is part of why we put this article together. But we are confident that once you have performed your research, you will see that the country is headed for an economic crash. If you want to secure your future, you need to start taking steps now. What steps are you going to take?
Eddie La Rosa and the team at Miami Real Estate Official are already on the streets bringing their clients investment opportunities, way before the main stream public is aware of any down shift in the market. Contact us for more information on the impending market crash.
Eddie LaRosa and Miami Real Estate Official of EWM Realty International are local specialists who work on providing the latest local information. If you would like to buy or sell in Miami contact us today at 305-968-8397 or send us a message here. We specialize in the Miami Real Estate market and our knowledge in the area has helped countless of our real estate clients.