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5. Especially when the first bad numbers appear, interest rates are at their highest
6. The bubble bursts just before the next election, this time it hits the world
7. The new president must pick up the pieces
Now we have after 8 years the end of the term of Obama.
2016 is an election year.
Let's see if the cycle takes place again.
What is the bubble this time ?
There are the derivatives, so the speculative bets on all possible financial instruments.
Since the last crisis in 2008, interest rates have been kept very low.
With this cheap money was invested heavily in derivatives.
The speculation was fueled insanely.
The Fed began to raise interest rates last fall.
In parallel, the American and the global economy started to weaken, which is clearly visible through the low
commodity prices.
Oil is as cheap as during the last crisis of 2008.
Therefore, the consumption in America is declining, the economy also.
What the experts say in recent months ?
Exactly the same as 2000 and 2008, everything is fine, the economy would grow, no reason for pessimism.
Now, however, the Fed of Atlanta released the latest GDP figures for the first quarter.
The growth is practically nil, only 0.1 percent.
The cycle has indeed repeated.
1. The result is the derivatives bubble by low interest rates
2. Experts said everything is going well and the economy is growing
3. From greed many climb on the train and the bubble is gigantic
4. The Fed begins to increase interest rates
5. The poor figures appear
What has not yet happened, the bubble is not implodes yet before the elections take place in November, but
we have only April.
On December 19, 2015 Donald Trump gave a speech in Cedar Rapids, Iowa where he warned for the first
time before the bubble burst.
He repeated this warning at various speeches.
He even said he hoped the bubble blows under Obama, and not under the new presidency.
Does not matter, the mess has either way to take the successor.
Only this time the crisis is taking gigantic proportions, 100 times greater than that of 2008.
We will see a collapse of the banks, which can look like the Great Depression of of 2008 a child's birthday.
Almost all banks will go bankrupt and thus erase all the savings, pension savings and insurance deposits.
Why ?
Because the greatest of all bubbles was created.
One has the 'too big to fail' banks given unlimited funds which they have used for speculation in derivatives.
How big is the derivatives bubble ?
According to Bank for International Settlements (BIS) in Basel, Suisse, the open derivative contracts
amounted to 553 trillion.
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