There is no denying that the global economy, as we approach 2020, has slowed down in terms of growth. Financial experts have repeatedly mentioned that the next financial crisis is coming sooner than we thought, and with it, a worse nightmare compared to that of the “Great Depression”.
As grim as this prediction might be, investors should not be so complacent and they should be aware of the warning signs. For one, the United States and China are engaged in a trade war, allowing for stricter tariffs on both sides and leading to a slow decrease in demand that would eventually devalue both the dollar and the yuan. Weaker currencies, partnered with declining home prices and a revised standard for loans, usually turn out ot be harbingers of a potential economic collapse.
Thankfully, term deposits still exist even while the financial world is crashing and all other investments are going down the drain. After all, term deposits still provide guaranteed returns as they are essentially risk-free and require little maintenance moving forward. For more information on term deposits, you may check out banks Newcastle Permanent for a start.
Global inflation is rising fast.
Global inflation will rise faster than most people expect, primarily due to global currencies losing their value. As a result, expect an extremely dangerous combination of higher interest rates and an increase in global debts. Most financial experts do not think the banks will be able to keep up with low interest rates while debts are spiking at an all-time high.
Trade tensions are not getting any better.
Tensions between countries are continuing to escalate and are not looking any better for the foreseeable future. The EU and the UK still have no clear solutions, the United States and China have constantly changed their policies that are extremely risky for their economies….
It is just too much uncertainty for large-scale businesses running world trade and causes extreme anxiety for the global market.
Currencies, while they are being devalued, also tend to become volatile.
Currency volatility, whether upwards or downwards, is a very bad sign for businesses. Simply put, volatile currencies can turn businesses bankrupt and further damage the reputation of monetary regulators and institutions, including the IMF.
Any time the world experiences a sudden surge/downfall in the dollar, a change of order in the yuan, or the impending destruction of the Eurozone, it’s never good news for investors and financial experts alike.
If you want to learn more about our blog, please click here.