Some market participants worry that the current U.S. debt is expanding, many countries into the real negative interest rates, virtual currencies are hot, the global economy seems to be taking the “crazy script”. Commodity king Rogers (Jim Rogers) re-emphasized that a greater crisis than the Lehman incident in 2008, must come.
Rogers said that he has been warning since 2019, a far more than the 2008 Lehman Brothers incident, a huge crisis is coming, if he is like the daily attention to economic information and careful study of people, must have a strong sense of early.
This crisis thing is like a snowball, and this snowball has been rolling on a long slope for a long time before the outbreak. Compared to the time before the Lehman crisis, the global economy is now at the “beginning of the end” and the signs are all around.
First of all, the bankruptcy in Latvia has long been no news; the financial difficulties of India, Turkey, Indonesia and other countries are also well known. What’s more, the situation in Germany, the locomotive of the European economy, is not good either.
Deutsche Bank is facing a serious business crisis, accumulating too many high-risk financial derivative assets, and by the end of 2018, the total amount was as high as $50 trillion, equivalent to 2.5 times the GDP of the United States.
Once such a large volume of financial institutions go bankrupt, the impact on the global economy will be no less powerful than the Lehman incident.
Turning to the United States, on the surface, the U.S. economic growth is quite strong, since the Lehman crisis in 2008, has lasted more than 10 years of economic prosperity, so long and so good market prosperity, never happened in the past.
Rogers stressed that when the market is overwhelmed by optimism, it will argue that “this time is different” when it encounters some signs of crisis. On the contrary, if most investors think so, it means that the market is in a state of madness.
In 2008, the size of the U.S. Federal Reserve balance sheet was $900 billion. Today, in just over 10 years, it has ballooned to $7.8 trillion, which is a difference of more than seven times.
Rogers believes that when a country is desperately in debt, it means that there are extremely deep, and not easily solved, structural problems in that society, and now is the time to pay the price.
Illinois, for example, which has Chicago, a large continent with a total population of nearly 13 million people, has long been plagued by skyrocketing local debt balances and is on the brink of bankruptcy. In order to solve the financial problem, the state has even legalized marijuana, sports gambling, auctioning off long-held masterpieces, but still can not make up for the broken network.
If a large state like Illinois happens to be financially insolvent, the ripple effect will not be underestimated, even if it triggers a domino effect, it is not a surprising result.
Rogers stressed that the huge “debt snowball” still keeps rolling, but now many countries are still printing money day and night. Unfortunately, it is human nature to forget the pain of a wound, and people will always trip over the same stones again.