Top 10 Reasons We’re Now Facing a Global Financial System Crash

The evidence is clear—You won’t believe how close we are to the largest collapse in history

We’re standing on the edge of an financial system crash, and may people don’t even realize it. Yet!

The signs are all around us—record government spending, mounting consumer debt, and major corporations hoarding cash like never before.

Even the world’s biggest economies, like the U.S., Japan, and Germany, are struggling to keep their heads above water.

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This article breaks down the top 10 reasons why we’re facing what could be the worst financial crash in history.

I’m going to walk you through what’s happening, why it’s happening, and what it means for all of us.

The global financial system is facing a financial system crash of unprecedented scale. With three of the five largest economies heading towards economic catastrophe, the risks are mounting.

The Top 10 Reasons the Global Financial System Crash is on Our Doorstep

Here’s a logical progression of the top 10 reasons we are in a global recession, followed by an economic depression and then the grand finale, a complete financial system crash:

1. Unsustainable Government Spending: U.S. government spending as a percentage of GDP is nearing historic levels, creating a precarious fiscal situation.
2. Skyrocketing Consumer Debt: U.S. credit card debt has reached record highs, with interest rates at unprecedented levels, mirroring unsustainable government financial practices.
3. Distorted Central Bank Policies: The Bank of Japan’s excessive ownership of ETFs and government bonds has caused significant market distortions, leading to instability.
4. Massive Insider Stock Sales: U.S. executives are selling off stocks at the fastest pace in over a decade, signaling a lack of confidence in the markets.
5. Surging Cash Holdings by Corporations: Companies like Berkshire Hathaway are hoarding cash, indicating a lack of confidence in the economy and anticipation of a downturn.
6. Persistent Manufacturing Recession: The U.S. manufacturing sector has been in recession for an extended period, signaling broader economic warning signs.
7. Extended Recession in Major Economies: Germany has been in recession for over two years, reflecting broader global economic fragility.
8. Declining Unemployment Claims Participation: A low percentage of unemployed Americans filing for benefits suggests the official data is understating the true level of economic distress.
9. Long-term Devaluation of Fiat Currencies: The U.S. dollar and other major currencies have lost significant value against gold, indicating long-term economic instability.
10. Rising Public and Household Debt: U.S. public and household debt levels have reached all-time highs, creating the potential for a systemic financial crisis.

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Government Spending: The Core of this Financial System Crash

U.S. government spending has reached levels not seen since World War II. At 43% of GDP, it is just 1% below the peak during the Great Financial Crisis.

These unsustainable spending habits are breaking the economy, setting the stage for severe financial turmoil.

Japan faces its own challenges. The Bank of Japan’s extensive intervention in the economy, owning about 80% of the country’s ETFs and 55% of its government bonds, has caused significant market distortions.

The recent rate hikes by the Bank of Japan have already triggered a 12% drop in the Nikkei 225, underscoring the instability.

Central Bank Policies Causing Unprecedented Market Distortions

Central banks, particularly the Bank of Japan, have been heavily involved in the financial markets, creating artificial support that cannot be sustained indefinitely.

The consequences are now becoming apparent, with volatile markets and a loss of confidence among investors.

READ ALSO: Global Financial Contagion Now Unleashed as Japan’s Yen Crisis Erupts

The Bank of Japan’s recent actions indicate that even the slightest change in policy can have dramatic effects, as seen with the substantial decline in the Nikkei 225.

Consumer Financial Behavior as a Warning Sign of the Approaching Financial System Crash

Consumer debt in the U.S. has skyrocketed, with credit card debt hitting a record $1.14 trillion in the second quarter of 2024. Interest rates have also reached an all-time high of 22.76%, mirroring the reckless financial practices of the government.

This growing debt burden is pushing consumers closer to financial collapse.

Corporate behavior is also flashing red warning signs. Berkshire Hathaway, one of the largest and most successful corporations, has increased its cash reserves to 25% of its total assets, the highest level since 2005.

This massive cash hoarding indicates a lack of confidence in the current economic environment and suggests that major corporations are bracing for a severe downturn.

Global Economic Indicators Pointing to a Deepening Crisis

Germany, one of the world’s largest economies, has been in recession for over two years, with its GDP contracting in five of the last nine quarters.

This prolonged economic decline signals a broader global economic fragility, which could trigger a domino effect across other major economies.

ALSO READ: Euro Facing Crisis as Germany’s Falling GDP Accelerates

Insider stock sales in the U.S. have reached their highest levels in over a decade, particularly among executives in tech giants like Nvidia. This rapid sell-off indicates that those closest to the markets are preparing for a downturn, further fueling fears of an imminent crisis.

The long-term devaluation of fiat currencies, particularly the U.S. dollar, adds another layer of risk to the global financial system.

The U.S. dollar has lost 98.5% of its value against gold since 1971, with other major currencies like the Euro and Yen experiencing similar declines.

This loss of purchasing power is eroding trust in fiat currencies, pushing investors towards alternative assets.

The Bottom Line

The interconnected nature of global economies means that the problems facing the U.S., Japan, and Germany are not isolated.

With government spending spiraling out of control, distorted central bank policies, rising consumer and corporate debt, and prolonged recessions in major economies, the world is on the brink of an unprecedented financial crisis.

Contributing Article: https://www.businessinsider.com/recession-fears-fueling-stock-market-crash-wall-street-chaos-positive-2024-8?op=1