Investors around the world are seriously concerned about the processes in the global economy. There are rumors that the humanity is on the verge of another global crisis (the so called 2nd wave), which is expected to be more devastating than the first crisis (2008).
According to Bloomberg, Jim O’Neill, Chairman of Goldman Sachs Asset Management, says that a new crisis will break out if the eurozone’s debt problems affect the US banking system.
It is worth mentioning that Mr. O’Neill assumes that the comparison with the previous global crisis is exaggerated. Last time we saw the collapse of the entire financial system. As a result, banks stopped lending, most companies sharply reduced production, thus causing unemployment growth. At the moment there are no such major threats to the world financial system.
Nevertheless, according to the analytic team of NordFX (among the top brokers of Masterofrex-V’s rating of FX brokers ) there is no optimism about the near future of various economies around the world. Today Greece has infected some other eurozone states with its debt problems. Moreover the steps taken by the EU authorities in order to solve the problems are ineffective. That is why the debt crisis may spread over other states.
Preconditions. Let’s say, there are serious preconditions for another global financial crisis. Stock markets around the world keep declining. The total loss is equal to $3-4 trillion. Investors do not believe in the effectiveness of the Fed Reserve’s measures. They do not trust G20’s promises to save Greece and to solve the eurozone’s debt problems.
Fed Reserve’s restructuring plan. Jim O’Neill assumes that the Fed Reserve’s plan of restructuring the US financial system (with stress on long-term US bonds) has failed to reassure investors.
The US stock market reaction started declining after the Fed Reserve’s latest statements.
Experts say another major crisis is coming…
According to the experts of , the USA’s economic problems can be solved by efficient political steps aimed at making national companies increase investment volume and create new jobs.
In the meantime, international markets keep declining while waiting for the results of the G20 summit. Last week the participants published a joint statement showing their commitment to cooperate in order to solve the eurozone debt crisis.
In particular, the financiers, bankers and ministers of finances are ready to make the European Financial Stability Facility (EFSF) more flexible by expanding its volume and authority.
James Hughes, Senior Market Analyst at Alpari (UK) (top 14th of Masterforex-V’s rating of FX brokers ), doesn’t believe in the efficiency of the current anti-crisis activities. He confirms the forecast made by in the article called Will there be another major crisis? In particular, there will be a period of market recovery attended by positive sentiments. However, it will be just a “timeout” before another rapid downfall.
Oil prices also confirm the forecast as they keep seeing a downtrend. For example, later last week Brent and WTI hit the 6-week low.
According to Ivan Kurapov (Dr. Key), Chief of the Department of Market Sentiment Analysis of , the Russian stock market is still weak, but there is a technical rebound. It means it’s time to close mid-term trades and to abstain from long-term trading. It is better to wait for a clear pattern.
The experts of the Department of Masterforex-V trading system expect the US dollar to strengthen its positions, especially against the Russian Ruble. The target is 35-37 rubles per dollar.
Market Leader and would appreciate it if you could participate in a survey. Please, visit the Academy’s forum for traders and investors and answer the following questions:
Will the world be hit by another major crisis in late 2011- early 2012?
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