There is a major global economic correction on the way to hit sometime between now and the US presidential election in late 2016. For most people, but probably most of all the self-employed, there has not been a full return to normalcy after the 2008 Global Financial Crisis onset, but there has been considerable relief for many. As was revealed to me in a regression last year, however, I do feel that retail space in North America will experience serious suffering in the next five years. Speaking on pure empirical terms, the signs leading up to 2007-2009’s onset of problems are all present once again: much higher stock market reads, a strong real estate market, lower official unemployment rates, and yet many mergers and business closures going on. What will make this next round particularly catastrophic however is that there is not much more ammunition to deploy in regards to stimulus money printing, lowering interest rates that are either at or near zero, and with debt figures that are higher (both personally and at the sovereign debt or federal level). The memories of the last crash are so fresh that people will be much more prone to panic and despair this time.
Greece will publicly begin its withdrawal from the eurozone this week (right now the banks and stock market are expected to be closed) and the country will likely shift more of its orientation toward China and Russia, though the former may have too many problems at home to help out. Australia, New Zealand, China, and South Korea, all up until recent times locations with high interest rates (a sign of financial health) have all slashed their interest rates drastically in the last 18 months for a variety of reasons (mainly to counter flagging exports or keep their real estate bubbles going) – and so in others words, there are no safe havens showing up this time with the emerging economies and BRICS being in worse straits than the US, Japan, and UK. Currency war techniques are also much more ubiquitous now than in 2008, further complicating how to move and plan financially (I expect a repeat of the US dollar, Swiss franc, and Norwegian krone exploding in value; but this time it may put the US dollar under too much pressure and finally end USD hegemony). I do believe Queen Elizabeth II’s visit to Germany this past week is some kind of gesture to try to keep affiliation with this country a priority while it may be tempted form stronger alliances with Russia and China and BRICS going forward.
With all that said, hard times can bring out the best in people and some progressive initiatives could potentially come about in this phase. I ask that everyone in these last months or year of general economic prosperity use this time to build up their cash reserves, and if you are particularly well-positioned, think in advance of what kind of deals you might want to snap up when misfortune potentially takes hold. We must not lose our moral compass, but at the same time, we all need to be nimble, swift, and adaptable when another shift takes place – the main key now will be to somehow get on the winning side of automation. Above all, as I have personally learned, we have to not let sentiment guide too much of our decision-making in a business and investment context.