It’s becoming ever harder to deny the possibility that the Economy is entering a time of depression. With the FTSE (see below) having almost a years worth of gains wiped out in a couple weeks and The Dow Jones Industrial average also dropping significantly over the past few weeks all the indicators suggest we are entering the final stage of this cycle, the bust.
Below is the FTSE 100 chart showing the last years gains all wiped out bringing the value back to where it was at the end of 2016.:
Historically the economy runs through a fairly predictable boom and bust cycle of between 7 – 10 years, the last cycle ended back in 2008 where we saw some of the Worlds biggest banks get ‘Bailed Out’ by taxpayers money. Since 2008 we have seen the Government Debt across the World grow exponentially as central banks continue to inflate the money supply at rates never seen before, also known as quantitative easing. With this in mind we can expect a rather dramatic collapse, possibly far more devastating than anything seen over the past century.
Paul Tudor Jones Warns of Mass Sell Off in Bonds
Hedge Fund Manager and Icon Paul Tudor Jones who predicted the largest fall in The Dow Jones Industrial Average back in 1987 has put our a harsh warning to investors:
The bear market in bonds is the natural upshot of the bull market in monetary and fiscal laxity… We are setting the stage for accelerating inflation, just as we did in the late ‘60s.
Jones goes on to say that in such a scenario the Dow, S&P 500 index, and the Nasdaq Composite Index, aren’t likely to provide a safe haven for investors, instead he recommends turning to commodities.
Mainstream Media Downplay Market Crash
As you’d expect the recent plunge in markets has been relatively downplayed by the mainstream financial journalists, which to be honest in a system which is so delicately held together by public confidence is the responsible thing to do. However the reality maybe far different, though many are reporting the worst to be over and recovery is now in progress this is likely just the beginning of a far greater decline in the Global Economy with market losses far greater than those received back in 2008 or the devastating losses of 1987’s Black Monday.
Although an economic crash cannot be predicted with 100% certainty, every day that passes is showing more signals which point towards such a scenario.
Banks Have Been Preparing For Some Time Now
We have reported on various instances where the World’s largest banks have been preparing for economic disaster. Some of the more recent preparations include a new proposal which would allow Banks to be able to freeze withdrawals to avoid bank runs during a crisis:
European Union states are considering measures which would allow them to temporarily stop people withdrawing money from their accounts to prevent bank runs
We are also hearing more and more people being refused access to their funds when withdrawal amounts exceed £5000:
Listeners have told Radio 4’s Money Box they were stopped from withdrawing amounts ranging from £5,000 to £10,000. HSBC admitted it has not informed customers of the change in policy
These reports are not only limited to the UK, we are hearing the same reports coming in from other European Countries and the US. If you place your money into a Bank you are effectively giving the Bank your money, in return they give you an IOU, however this IOU is not necessarily redeemable.
In just about every major financial collapse there are always winners, the biggest winners are of course the very institutions that create these ‘Boom & Bust’ cycles, they have the unfair advantage though of foreknowledge.
But anyone can prepare for market crashes and ensure that in worst case scenarios they have secured some wealth.
The two biggies here are Gold & Silver, with such a long history in it’s value and usage as a storage of wealth you really cannot go wrong with Gold & Silver. Silver is currently vastly undervalued and with technology advancements requiring Silver more and more it also has a demand outside that of investors. Gold is also undervalued at the moment with little movement over the past few years.
Experts in within the Precious Metals field are predicting huge increases in Gold & Silver over the coming couple years:
So even if you can only afford a small amount of Gold or Silver to add to your portfolio it is money well spent with 1000’s of years of history behind it as a store of value you can’t go wrong.
Bitcoin – aka Gold 2.0
When it comes to a safe, easily transferable and highly secure store of value you don’t get much better than Bitcoin, so much so that many are calling it Gold 2.0.
Bitcoin is a cryptographically secured currency which is decentralized via a Proof-of-work blockchain. By its very nature it is deflationary with a maximum number of Bitcoins being limited to 21 million. Once these 21 million Bitcoins have all been released into circulation there will never be any more produced.
It’s value has historically been extremely volatile, however in it’s short lifespan of just 9 years we have seen the value increase from zero to a high of $20k at the end of 2017, it’s value has since corrected and currently sits around $11k.
Unlike Gold & Silver, Bitcoin can be easily transferred around the World at extremely low rates relatively quickly.
You can buy Bitcoin relatively easy these days from various exchanges, probably the most well known being Coinbase, however there are also many other exchanges now where you can purchase Bitcoin.
It’s worth baring in mind though that Bitcoin is still in it’s infancy and thus unlike Gold which has a relatively stable value Bitcoin can be highly volatile with gains and losses of up to %50 in a single day, so if your investing in Bitcoin please be sure to not invest funds which you cannot afford to lose.
It’s Better To Be Safe Than Sorry
Global Economic collapses are predicted just about every year by someone, especially the alternative media, precious metal and Bitcoin communities and many people reading this are possibly thinking to themselves ‘and yet another baseless prediction’, however no one can deny that the US economy is in poor shape, with it’s unpayable debt and ever increasing money supply a downtrend is imminent, the US is not alone either, just about every nation state in the World is in extraordinary amounts of debt with further banking bailouts as in 2008 looking ever more likely in the coming months and years.
With all this in mind it’s better to prepare for the worst, after all it’s not a matter of ‘if’, its a matter of ‘when’.
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