Is the world really under the threat of another global economic crisis?

The World Bank, which is famous for its rather cruel and straightforward forecasts, has just made another “revelation”: the world is a few steps away from a global economic disaster.

Previously there were many similar forecasts predicting another global economic crisis. They were made by numerous economists, politicians, bankers and even journalists. In particular we reported about Charles Nenner’s prediction of market collapse and major war. Yet there is still no global crisis. However, we cannot say that it is not going to happen in the future. Probably the steps taken by the governments around the world have eventually had a temporary positive effect, which will definitely end at some point in the future. Masterforex-V Academy analysts say that the positive effect is about to be exhausted and that the world seems to be unprepared for another global depression.

Are there any reasons and preconditions that cannot be ignored?

According to Robert Zoellick, President of the World Bank, the humanity is on the verge of another most severe economic crisis. He is a world-famous economist, which has always been known for his ability to tell the truth the way it is, mentions the following key points of today’s pre-crisis state:

·         The lack of food (food deficit). Mr. Zoellick is sure that the probability of the recurrence of the food crisis is very high. The food prices have reached critical levels. At the moment they are 36% higher than in 2010 and have come close to the levels of 2008. Yet, what do food price hikes always result in? Right. It increases the amount of those who cannot buy even the essential food to survive. According to Mr. Zoellick, because of such a rapid increase in the food prices around the world over the last 8 months the amount of those living below the poverty line has increased by 44M people, i.e. they can only spend on food up to $1,25 a day. That is why the economist is sure that the poor cannot wait any more as there are over 1B undernourished people around the world. And the amount is constantly growing. Yet, what happens when the amount of the starvelings growns? Right! It is starvelings' revolts that happen.

·         The African revolutions. It was thestarvelings' revolts that grew into revolutions in numerous African countries. The biggest part of the starving population lives in Africa. The logic chain is simple: people are hungry, they don’t have enough money to buy food, they don’t have jobs to earn the money, so they start a revolt. This is the second critical point that has an impact on the global economic situation. Besides, a considerable share of the world’s crude oil reserves is located in Africa. So any economic or political crisis in the area instantly affects its price.

·         The growing prices on energy carriers. This is how we have come close the 3rd critical point of the current pre-crisis situation – prices on energy carriers. For Example, George Soros assumes that if the prices on crude oil keep growing at the same pace as within the “revolutionary” months, the economic growth, which has just gained the upper hand over the latest recession, will fail. Cheap energy carriers are the driver of the global economy while expensive ones are a break on the global economic development. However, when looking at the Brent chart, which has recently showed the price getting over $120/b, you start to understand that there isn’t even a trace of cheapness.

 

The crisis is inevitable. What is the way out?

On the assumption of all the above-mentioned, it is difficult to not agree with Mr. Zoellick. He says that one major shock is enough to start a new wave of the global crisis. For example, the Japanese nuclear disaster well may turn out to be a major global shock if it is not localized within the next 1-2 months. Japan has been suffering huge economic and financial losses, which may provoke serious shocks in the financial markets around the world because Japan is one of the world’s economic powers (at least it was before the disastrous earthquakes, tsunamis and the nuclear disaster). If Japan faces another series of big-scale earthquakes or the Japanese fail to solve the nuclear problem, the world will get a 99% chance of getting another major economic crisis.

Market Leader and Masterforex-V Academy would appreciate if you shared your opinion on the matter at the forum for traders and investors:

Should we really get ready for another global crisis and why do the world-famous experts warn us about it?

 

 

You are free to discuss this article here:   forum for traders and investors