With issues facing us such as the Ebola crisis and ISIS along with the constant stalemate in congress between Dems and Republicans, the US will find itself facing another financial crisis sooner rather than later. Market trends are dependent on what is happening in the world today. As expected with recent news of the Ebola situation, the markets have slid into tailspin because of decreased confidence in the American government. There is also issues with many Americans being underemployed or still facing long term unemployment. There should be ways that this should be changed before it is too late and we find ourselves in another financial crisis.
We have so much going on. Ebola crisis in Africa, another possible war, Ebola crisis possibly starting here, that's quite a bit of money that we will be investing into things to get them taken care of. I think we need to budget out money out better for times like these, but we haven't so Im sure we will see some effects
In this era of easy money, interest rates are low and cash is cheap. When cash is cheap, people feel comfortable getting into more and more debt for education or investing purposes because the interest payments are almost (relatively) non-existent. The Federal Reserve knows that they have a quandary on their hands, and by delaying the inevitable task of raising interest rates, the bubbles related to their weak monetary policy are only growing larger by the days. When the bubble bursts, the effects will be felt far and wide.
he central bankers' central bank, the Bank of International Settlements,
resonantly describes them in its latest annual report as "like an
elephant in a paddling pool" - in the sense that they are enormous
compared with many of the economies in which they put their (our) cash,
such that when they decide to invest or disinvest, they "can amplify
So just imagine what that would do to bond and share prices of a
smaller economy, if the asset managers decided to pile in or stampede
out in a herd - which, errr, you may know is how they typically tend to
In those smaller economies, as and when the asset managers
charge for the exit, businesses and governments can find themselves
starved of vital funds.
And since the domestic currencies of these relevant economies
would tend to collapse in those circumstances, the corporate borrowers
would struggle to repay and refinance bond debts as they fell due.
We would be in the territory of serious financial and economic crisis