Seems that anyone that proffers scenarios of financial collapse for planning alternative investments is treated like a pariah by all but their pets. Even my favorite goat only comes when I have food for him now. Were their never ending positive economic news coming, there would be nothing to fuel financial collapse planning and all would be go long in stocks and forget about it.
Economic collapses and financial disasters are common enough. They sprout every 20 years or so in a relatively stable economy, then flame up to inferno proportions at about the 70 year mark, give or take a decade. Currencies collapse. Wars destroy a whole generation of potential contribution.
As an aside, the idea that wars produce economic activity is a convenient delusion. This delusion is akin to saying that if we all smash our cars up, and buy new ones, then our economy will improve. Certainly for the auto makers. That same money could have been spent a million different ways to improve our lives but is now going to a small cadre, while impoverishing the majority. That is what war does – only worse.
On to the financial collapse scenarios that will drive alternative investments to avoid the wealth destruction that occurs during these economic crashes.
1. Central planning has arrived. Central banks around the world now have enough on their balance sheets – about $15 trillion – to buy a major portion of the world's stocks. This is a trend that will implode at some point. Before that point is reached, the central planning will reduce supply, increase costs, and destroy the employment picture for smaller, more efficient and creative companies. The net effect is that a single meeting over the weekend can rock a stock market to the ground. If Merkel closes the door on Greece and Portugal, then Euro and Europe will lock up. Or if the charlatans called bankers and the government suits decide to turn on the fiat faucet of currency, as is the case almost always, then the crisis passes. Greece and Portugal will get crushed, but the markets will fly.
2. Attack on the U.S. Dollar from some friendly enemies. China, Russia, Brazil, the whole middle east, Pakistan, and much of E. Europe could launch a currency and bond attack that will send the currency market reeling. This has happened already to a limited extent. Our Federal Reserve has taken up the slack, but that can only go on so long. Eventually the system collapses because the other countries will refuse the dollar knowing the dollar is being inflated into oblivion.
We will not talk about specific numbers because they have become almost meaningless by their extreme size. China has already taken their massive dollar stash of $2-3 Trillion and converted it into mines, commodities, land in foreign countries. That kind of activity has pumped up commodity prices world wide. Nothing to stop more of that until the dollars days are over.
3. War will slam world trade down, oil prices up, turn the dollar either into a local only currency or destroy for trade, dropping the hammer on export oriented countries that