Global recession WARNING: Next crisis will top Great Depression and is just TWO YEARS AWAY

They said the world’s financial markets were brought to their knees by easy credit 10 years ago and predicted a vast global debt mountain could to do the same at any time.

Murray Gunn, head of global research at Elliott Wave International warned a worldwide debt of $247 trillion could easily spark the next international crisis.

He said: “We think the major economies are on the cusp of this turning into the worst recession we have seen in 10 years.

“Should the US economy start to shrink, and our analysis suggests that it will, the high nominal levels of debt will instantly become a very big issue.”

Mr Gunn said low wages had led to a decade of escalating household debt across the US while the country’s national debt has more than doubled to $21 trillion over the same time frame.

Economists say that debate will have to be paid at some time and fear the tipping point will come when a wave of defaults by overwhelmed borrowers — potentially squeezed by rising interest rates — leads to a widespread reduction in spending and incomes.

And Mr Gunn sees a brutal deflationary spiral ahead in the next global downturn.

He said: “People will look to the central banks to help them out, but the authorities will be found wanting.

“Our prediction is that central banks will go from being feted for ‘saving the world’ in 2008 to being vilified for being impotent in the coming deflationary crash.”

Economic commentator Peter Schiff warned a major economic downturn could begin with the next two years.

He said: “We won’t be able to call it a recession, it’s going to be worse than the Great Depression.”

“The US economy is in so much worse shape than it was a decade ago.

“I think we are going to have a dollar crisis — you think the Turkish lira looks bad now, wait till you see when the dollar is imploding and we have a sovereign debt crisis in the US.

“The US government is going to be given a choice between defaulting on the debt, or else massive runaway inflation.”

Ray Dalio, head of the $150 billion Bridgewater Associates hedge fund, also warned a new economic downturn could be even more devastating than the world crash of 2008.

He said: ”In two years, the time will come to start to worry. It will be more of a dollar crisis than a debt crisis and I think it will become more of a political and social crisis.”

Leave a comment

Your email address will not be published. Required fields are marked *