“Bankruptcy happens gradually, then suddenly,” Ernest Hemingway
All signs point in the same direction. We are heading toward another financial crisis and, this time, it will likely be much worse than 2008. There is a growing chorus of economists and analysts who have already sounded the alarm, but most tend to wrap their warnings in mind-numbing statistical detail. In the following article, I aim to outline where we are — and how we got here — in a simplified manner, with the hope that you can prepare yourself as best you can.
In the early 2000s, I wrote several articles warning investors about skyrocketing deficits, debt, overvalued stock markets, and dangerous policy decisions by government and the Federal Reserve. As we all know, by 2008, a lot of what I was afraid would happen, happened. When the crash came, I further predicted we would not go into a depression quite yet, for one simple reason: The Fed would print a lot of new money (quantitative easing), which would act as a floor for the entire financial system. I warned we would pay the price down the road because there is no such thing as a free lunch. Or, as The Eagles song says: “Every form of refuge has its price.”
