Gefira #23 Why we are heading to financial calamity

Description

We are heading closer to 2020, the year in which we expect the world to experience the next global crisis. In this Gefira we explain the main financial issues that will lead us to the next financial crisis. There is no chance that the French President Macron will be able to reform the French economy or be able to persuade the Germans or Dutch to accept his plans for further political integration of the European Union. As a consequence the euro will not survive beyond 2030. However, social and economic problems are not limited to Europe. US debt is spiralling out of control and the trade deficit has reached new records. President Trump’s attempt to save US industry is ten years too late and we do not expect him to succeed.

In this Gefira we enumerate the problems that will lead to the next financial crisis. We will soon reach the point of reckoning and our team has to look beyond the coming crisis. Who will be the winners and who will be the losers? Every crisis is also the beginning of something new. In this Gefira we also look at the future of Russia now that President Putin has been re-elected. The recommendations are about cryptocurrencies. We advise our readers to review Gefira #10 for some more details on the idea behind bitcoin. We see bitcoin as a risky investment with an extremely high reward potential, and expect it to eventually reach 75.000 dollars. However, we would also not be surprised if it disappeared overnight.

Why we are heading to financial calamity

In 2015, when Donald Trump nominated himself for the presidential election, we published the article: “The world should prepare for Mr Trump as the next president of the USA”. In the article we quoted Donald Trump as saying: “Take a look at what China have done, they have taken our money, our jobs, our base, our manufacturing, and we owe them 1.5 trillion dollars, that’s like a magic act, they have taken everything, and we owe them money.” Donald Trump rightly noticed that the US’ trade deficit is unsustainable and that China is a threat to the US hegemony. The US industrial base is eroded, and the US administration has to take action. A year ago we wrote in Gefira that a trade war was unavoidable. However, it is ten years too late to change course, and as Marc Faber rightly said, the US is on its way to becoming a third world country.