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What can cause the next World economic crisis?
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Loading...Ten years after the collapse of Lehman Brothers and the latest global economic crisis, many analysts and economists are looking for an answer to what the next economic crisis will be caused by.
One of the most controversial theories is the high level of debt in China. However, Wells Fargo economist Jay Bryson told CNBC's Squawk Box Europe he does not believe this would happen. The reason is that China's debt is held in China and not scattered all over the world like 10 years ago in the form of Collateralized Debt Obligations (CDOs).
Currently, the declines in emerging markets and Trump's war trade have also failed to break down markets in Europe and the United States, and only the Hong Kong stock market is now in the bear territory. Therefore, this scenario also appears to be an insufficient reason for the next economic crisis.
If we ask one of the gurus of invest, Warren Buffet, economic crises and market bubbles are created by greed. He says that people's thought "My neighbor is more stupid than me, and he makes a lot of money, why not me?" is devastating and is the cause of the bubbles inflating in the market that sooner or later are bursting. This scenario did not work with the collapse of the cryptos since the beginning of the year, and the world economy has remained all over again.
According to Jay Bryson, the next economic crisis will come from a cyber attack or a power grid failure. Although this sounds like science fiction, this is an event we have not seen before in history. having in mind the billions spent every year on cybersecurity, this potential cause should not be underestimated. If one morning we wake up and we do not have access to our money due to a cyber attack, this will cause turmoil and may cause a crisis on a large scale, the economist says.
Source: CNBC
Picture: pixabay.com
Trader Nikolay Georgiev Read more:
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