The next financial crisis

Mises Institute/Daniel Lacalle/11-10-2018

“When the biggest bubble is sovereign debt the crisis we face is not one of the massive financial market losses and real economy contagion, but a slow fall in asset prices, as we are seeing, and global stagnation. The next crisis is not likely to be another Lehman, but another Japan, a widespread zombification of global economies to avoid the pain of a large re-pricing of sovereign bonds, that leads to massive tax hikes to pay the rising interests, economic recession and unemployment.”

USAGOLD note: In the interest of equal time, Daniel Lacalle says disinflation, not inflation, will be the culprit in the next financial breakdown. Gold, to the surprise of its critics, did very well in the during the disinflationary crisis that began in 2007-2008 reaching its all-time high in mid-2011 at over $1800 per ounce.  Disinflation, though, is only one of the maladies against which gold serves as a shelter.  History has shown it to protect its owners against economic stormy weather of all descriptions – inflation, deflation, disinflation, stagflation and hyperinflation.

Repost from 12/7/2018

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