I’ve had a couple of conversations in just the last week where the other person has brought up the question of a coming financial crash. The subject has been there in the background chatter for a while but the problem is that if you speak to soon you can be accused of ‘scaremongering’ and if you don’t speak then nothing is done. I mean one of the things that many argued after the last crash was that ‘no-one’ predicted or could have predicted what happened. Well the thing is that I read and heard a lot of background worries about the western economies long before the 2008 crash, it’s just hard to say exactly when and in what way the shit will hit the fan. For that reason those that gave warnings were dismissed because they couldn’t give an exact time. * So what warning signs and worries are people seeing at the moment? Well here are some of the things I heard and read about this in a US context · The US has had a long period of growth engineered under the Obama admin and continuing into that of Trump, the tax cuts to the wealthy and corporations have increased stock market speculations and share boosting buybacks in the short term but worries about this been or becoming a bubble are making the rounds. · US household debt has set yet another record high. In the first quarter of 2018, it reached $13.2 trillion, household debt is now half a trillion dollars higher than its previous peak in 2008. · US government debt has ballooned so that the federal government could soon pay more in interest on its debt than it spends on the military, Medicaid or children's programs. · The US banks are still ‘too big to fail’ with the six largest US banks now controlling nearly 70 per cent of all the assets in the US financial system, having increased around 40 per cent since the last crisis (against overall asset growth of only 8 per cent). JP Morgan, the largest US bank, has over $2.4 trillion in assets, larger than most countries. · US federal reserve Interest rates at 2.25% still too low to deal with a crash. · Fears over the possible effects of any US lead trade wars. The main worries seem to be that the US and world banking system have not actually dealt with many of the problems highlighted by the last crisis and that in fact the US government and international systems are actually in a worst position than they were back in 2008 to deal with another crises.
I remember learning about the Great Depression in school and the teacher said it can never happen again because there are laws in place now. I was a little kid I never thought more of it or asked what the laws were. I just believed it. As an adult I see there can never be laws like this as long as some people think as they do in America. Republicans are always looking for max profit and minnium regulation. One should go with the other for good capitalism. Democrats do as well to a lesser extent but the idea that goverment should regulate nothing is mostly a right wing one. As long as there are not limits the 1% will take all they can while they can. Humans are greedy and our system rewards that. As Gordon Gecko said "greed is good". It is the ultimate make your own way in life virtue of American capatilsim. Use who and what you can and if they don't use you then are too stupid to deserve success. We it all crashes as it always does like clock work they are no effected only the middle class is. Things get bad and the middle class is restless for a few years but soon enough the same old right wing ideas come up. Renumber 2008? All the factors that created that still exist. In 2009 we hated these factors now some accept them as the free market.
sort of reminds me of the situation with the environment actually. there's supposed to be a federal report issued about that tomorrow. it's unlikely that anyone heeds the warnings. but you'd think that we'd have a sort of hyper-sensitivity to another financial crash. i seem to remember (perhaps erroneously) something about reversing sarbanes oxley or some such nonsense about loosening oversight. it sounds dumb whenever i hear it.
