There are three financial bubbles of the global economy that are about to burst. In addition to this, there are three economic events that we should expect to transpire once the crash has started – a “crash and burn” stage for the US economy, continually rising interest rates, and the possible global impact of the Chinese market collapsing. So what can you expect to see next in the second phase of the crash?
There are numerous theories that have been thrown out on the table as a result of speculating about the inevitability of an economic crash here in the US and the eventual results of this crash happening. However, the following four aspects or events make the most sense given the past history of recessions in this country:
Given the current debt crisis that we are experiencing in the US, foreclosures on homes will escalate, therefore causing a drop in real property values.
The only option for owners who want to stay in business will be to either decrease the labor force or increase in the employment of outsourcing entities. Otherwise, their debts will become insurmountable and they will be forced into bankruptcy.
As the situation becomes more critical, and as retirement draws closer for the US “Baby Boomers”, you will see a massive sale of their market stocks in the hopes of them being able to live off the returns on these investments.
It follows suit that this massive loss (or withdrawal) of stock market investment capital will trigger a reversal from a bullish to a long-term bearish market in the US and possibly other global markets as well.
The United States has established a continual practice of borrowing money to beef up law enforcement and military forces. Additionally, government contracts for the manufacture of war-specific weaponry and military wages needed to be paid for as well. It has now reached a point where sacrifices are being made within the infrastructure of American society in order to keep funding law enforcement and military entities.
As a result, this has given rise to opposing schools of thought – one side sees these contrived sacrifices as necessary if homeland security is to be ensured, while the other side contends that such aggressive spending is unnecessary. This has given rise to another grave economic. It has resulted in the US relinquishing the power to manage the affairs of foreign nations that benefits our economy.
Certain countries today, especially those oil-producing nations which used to rely on US support, have become their own power centers and are very efficient at managing their own economic and financial issues without the need of our financial assistance. Suffice it to say, the groundwork has been laid for an economic recession in the US, and the hard-core proponents of economic doom and gloom are saying that this recession will lead to a very serious depression as a result.
There have been a variety of shifts in economic power, societal priorities, and spending habits that have created an economic domino effect with the following characteristics:
Declining quality of life for working persons
Decreasing property and real estate values
Devaluation of the US Dollar in the global trading market
Increasing inflationary rates
Rising unemployment numbers
Subsequent growth in the levels of poverty
Additionally, there are the psychological effects on a society that is in the throes of an economic crash, namely a marked increase in the areas of anxiety, civil unrest, and fear – not only among working class individuals, but business owners as well.