I try to be very restrained when I talk about the importance of current events. I try not to overreact by sounding an alarm bell/hitting a panic button when I read about something that stands out. I try not to overreact because when a person sounds the alarm bell too much people tend to grow weary of their constant overreacting to events. I mention my propensity to not overreact because I want people to know that there is good reason to be concerned when I am concerned. Right now there is something that has me concerned to the point that I am now going to now share my concern with you…
I am extremely concerned about the future direction of the global economy and the global financial system. There was a great article written by Ambrose Evans-Pritchard earlier this week that highlighted several economic and financial indicators that suggest we are currently seeing a rapidly deterioration in global economic and financial conditions. In addition, some financial commentators that I trust (overall I don’t trust many financial commentators) see something bad coming soon. One of these financial commentators posted a podcast yesterday discussing the prospect that we could be seeing very challenging times ahead: Link
- The podcast is 36 minutes long, but it is well worth the time to listen to it.
What my mind, instincts, and people who I trust tell me is that we are getting closer to experiencing a deflation scare that is going to drive asset prices lower. I do not know whether the deflationary scare is going to be as violent as we saw in 2008 and early 2009 or worse. However, at some point during the downturn central bankers around the world are likely going to print unprecedented amounts of money in an attempt to push asset prices back up. The real danger is that global central bankers may turn a deflationary depression into a hyperinflationary depression.
- A scenario like this would not lead us directly into the start of the End Times, but would bring us much closer to the start than we are now. The scenario would be the perfect catalyst for political turmoil and eventually widespread war.
Last year one of my finance professors who’s managed money probably longer than I have been alive told me this was the most challenging investment environments he’s ever seen in his lifetime. If these financial commentators and I are correct the investment environment is going to get a lot more challenging…
