These three years could very well rhyme economically and financially. In 1998 the worlds banking system nearly collapsed as the Asian crisis morphed into the Long Term Capital Management disaster in New York.
We all remember what happened in 2008, no need to elaborate on what happened that year. Suffice to say we came within days of every bank on the planet shutting its doors and global unemployment soaring to astronomical levels.
Now we are on the last legs of the current expansion cycle, the second longest in US history. Debt levels are higher than in 2008 and the global economy is beginning to slow. Will it turn into another disaster as before? I think it could. LIBOR rates have spiked recently, as have bond rates. Quantitative easing has morphed into quantitative tightening, or in the case of Europe, quantitative slowing. Interest rates are rising. China is slowing rapidly, as is the USA.
Last week I read an excellent summary of where the global economy is at and you can read it here. In February this year I wrote a 10,000 word essay explaining in detail what happened in 1998, 2008 and what I believe will unfold this year and in the next few years. You can read that here.
Get yourself ready because the next ten years will be very different from the last. In 1998 other banks bailed out a troubled bank. In 2008 government central bank had to ball out all banks. In 2018 and beyond who will bail out the central banks? That’s when I blieive they will hit the inflation button to wipe away all the debt, and everyone’s savings as well.
Get yourself ready!