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Top 10 Signs That Point To Economic Collapse
It is always best to fix the roof when the sun is shining, and with stock markets at working levels around the world then there is no better time than now to make sure investments and financial security are in working order. That being said, there are several factors that are pointing towards an economic collapse. We need to be mindful of that and ensure that we do not hit a record low we saw in 1929, 1991 and 2008.
The Rich Ten
10. A Bad Start To The New Year For The Stock Market
In the first few days after the New Year [2015], the S&P 500 was down by a total of 2.73%. This only happened two other times in economic history when it has declined by more than 3% in the first threetrading days of a year. It happened in 2000 and 2008 and both years saw a huge stock market decline.
9. Choppy Financial Market Behavior
Calm markets have a tendency to go up. When the market is choppy, it will go down. The Dow was very claim as it began to rise in 2006 and most of 2007. It, however, became choppy in 2008 as we were hitting a recession and the U.S. dollar was losing its value.
8. The price of oil crashes
The price of oil has dropped below $45 a barrel, a 6 year low. In June, 2014, the oil was priced at $106 a barrel. There was only one time in history when the price of oil dropped by more than $50 in less than a year and that was in 2009. The reason why we are not seeing a drop in gas prices is because there is a strike at a U.S. refinery and most oil companies are trying to profit from the large margins. It could also signify an economic downturn.
7. The Price of Gasoline Takes a Tumble
This year, millions of Americans and Canadians were celebrating the low price of gasoline. They werecelebrating a similar victim in 2008 as well. However, it turned out that there was nothing positive from it. Millions of people lost their jobs, their businesses and their livelihood that same year.
6. China Slowdown
The economy in China is slowing down which signifies an increasing risk for investors around the world. China contributes to more than a quarter of world economic growth and is the largest buyer of commodities in the world to fuel a large construction boom. Industrial production has decreased by 0.4 pc in August from a month earlier.
5. Junk Bond Crash
Similar to what we saw in 2008, we are witnessing the start of a junk bond crash. High yield debt related to the energy industry is on the edge of a crash. Fortunately, investors have started to bail out a broad range of junk bonds. Fyi, Junk bonds are IOUs from corporations or organizations that states the amount they will pay you back (principal), the date they will pay you back (maturity date) and the interest (coupon) they will pay you on the borrowed money.
4. Global Inflation Slows Down
When economic activity is slowing down, so does inflation. This is something that we saw happen in 2008 and is happening once again. It is being projected that the global inflation with fall to its lowest level since WWII.
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