The next financial crisis may be just around the corner | ROAR Magazine.
As growth stalls, stocks tumble and investors fret, the question is no longer if there will be another crisis, but when and where it will strike first.
The headlines look eerily familiar: global growth is stalling, stocks are tumbling and peripheral bond yields are rising sharply. With the Federal Reserve expected to wind down its asset buyback scheme later this month and the Ebola outbreak and geopolitical instability spooking investors, world markets are returning to a highly volatile state. “The market pathologies we all grew to know during the crisis of 2008 are returning,” the Financial Times wrote last week. The question is no longer if there will be another crisis, but when and where it will strike first.
The bottom line is that the global financial meltdown of 2008-’09 and the European debt crisis of 2010-’12 have never truly been resolved. After governments disbursed record bailouts in the wake of the Wall Street crash, the world’s leading central banks simply papered over the remaining weaknesses by subsidizing essentially defunct financial institutions to the tune of trillions of dollars, buying up swaths of toxic assets and providing loans at negative real interest rates in the hope of reviving the credit system and saving the banks.
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