Jim Rickards: The Economic Collapse WILL NOT Happen Overnight!
This time, however, there will be several crucial differences that will leave investors and regulators unprepared.
The next financial collapse, already on our radar screen, will not come from hedge funds or home mortgages. It will come from junk bonds, especially energy-related and emerging-market corporate debt.
I believe we could see an economic meltdown at least six times the size of the 2007 subprime mortgage meltdown
Energy-sector debt has been called into question because of the collapse of oil prices. And emerging markets debt has been called into question because of a global growth slowdown, global deflation, and the strong dollar.
The result is a $14 trillion pile of corporate debt that cannot possibly be repaid or rolled over under current economic conditions. Not all of this debt will default, but a lot of it will. Most of the energy related debt was issued in the expectation that oil would remain in the $80 to $130 dollar per barrel range.
Most of the emerging markets debt was issued with the expectation that the dollar would remain at its weak 2011 levels. Instead oil is down, and the dollar is up, which capsizes these expectations. The moves have been swift and dramatic. Over the past six months, oil has crashed 52%, while the U.S. Dollar Index rose 15%.
The world is looking at a debt catastrophe much larger than…
the mortgage market in 2008.
The good news for investors is that this fiasco will not
happen overnight.
It will take a year or two to play out.
The good news for investors is that this fiasco will not happen overnight. It will take a year or two to play out. The panic of September 1998 started a year earlier, in Thailand in June 1997. The panic of September 2008 also started a year earlier, in August 2007, when CNBC commentator Jim Cramer screamed, “They know nothing!!” on live television in reference to the Federal Reserve.
This new junk debt fiasco started in the summer of 2014 but will not reach its peak until 2016 or later. Even companies and countries with dim prospects often have enough cash on hand to make payments for a while before they actually default. In the meantime, you can profit.
The bond defaults have not happened yet, but our intelligence triggers are already visible in the form of lower oil prices and the strong dollar. In intelligence analysis, we don’t wait for disasters to happen. We look at today’s information, what we call “indications and warnings,” and use inferential techniques such as inverse probability to see the future.
The strong dollar is deflationary. This means oil prices will likely remain low. This means much of the energy-sector debt cannot be paid off and will default. The defaults have not happened yet, but you can see them coming. There is still an opportunity for you to profit from the coming collapse in junk bonds, but the time to act is now.
Excerpts from an article written by Jim Rickards.
And you also have the option of an affiliate plan that allows you to make a good residual income, if someone you knows buys it. Click here for more information.
Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.
"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
Please Help Support BeforeitsNews by trying our Natural Health Products below!
Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST
Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST
Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!
HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.
Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.
MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser! Cleans out toxic buildup with oxygen!
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover - Reduces Smart Meter radiation by 96%! (See Video).