I was reading these days several articles in the financial press. All is so quiet… dangerosuly quiet. Wall Street Journal, Financial Times, LA Times, Forbers etc they are all silent about what the banks are doing or what other financila insitutions are up to. To me, this means only trouble brewing.
Economic data for US looks slightly promissing and the real estate market is slowly growing. Not an accelerated pace (foreclosures in US declined to 650,000 in August, down from 1 million 1 year ago and 3 million 5 years ago), but still… EU is stalling, with Germany and France almost to a halt (industrial production -0.1% to LY, first time in recent history when Germany stumbles a bit). Usually US profits from these moves.
So what next?
From what we see here at doitinvest.com on the market, the next crisis will be probably generated by one of the major incoming shortages. So here are 2 scenarios:
1. Food shortage and services inflation
We are moving from a deflationary economy to a slightly inflationary one. Food prices seem to grow all over the world, and this is eating normal people’s revenues and making them work more for the same salary. Long story short, the next crisis might finally be a prices crises. Governments will fight keeping the food inflation low, but hey, what can they do?
2. Financial services access
We all need a bank account and possibility to pay for everything. We all need internet access nowdays. Good smartphones. And access to entertainment media. Guess what – banks are the gate keepers there. And they have the interest to restrict it and charge more and more. Finance for real-estate is already hard to get, with loans for house purchases in US and Europe very thin so – in short – next crisis might be a “too-expensive” banking system crises, with very expensive loans to take on board.
So what do you think about this?