Amid the renewed optimism in 2015, there is an alleged looming global economic collapse in 2015. The financial crisis is pegged on the oil prices going south and the blurred business activity in the US and the European Union.
If it were true, then the US markets will go down and the ripple effect spread to the developing countries in matter of about 6 months. This is from the famous economic quote that says: “When the USA economy sneezes, the rest of the world’s economy catches the cold!”
However, it should be noted that the looming financial crisis is all based on speculations and no hard facts to prove it so far.
Economic crashes of one kind or another occur approximately every 7 years going all the way back to the Great Depression.
2008 : Lehman Brothers collapsed, the stock market crashed and we were plunged into the worst recession that we have experienced as a nation since the Great Depression.
2001: The dotcom bubble burst, there was a year of recession for the U.S. economy, big trouble for stocks and that little event known as “9/11″ happened that year.
1994: Yields on 30-year Treasuries jumped some 200 basis points in the first nine months of the year, hammering investors and financial firms, not to mention thrusting Mexico into crisis and bankrupting Orange County.
1987: The stock market plummeted 25% on “Black Monday” on September 27th of that year – the greatest one day stock market crash in U.S. history up until that time (surpassed by the massive stock market crash of September 29, 2008).
1980: In 1980, the S&L crisis was blooming and everyone was talking about the “stagflation” that we were experiencing under Jimmy Carter. The Federal Reserve raised interest rates dramatically to combat inflation, and this helped precipitate the very deep recession that we experienced early in Ronald Reagan’s first term.
1973: was the year of the Arab oil embargo, super long lines at the gas pumps, and a recession which ended up stretching all the way until 1975.
1931: Those that have studied these things say that the pattern keeps going back all the way to the Great Depression pointing out correctly point that the stock market crash which began the Great Depression was in 1929, but actually the worst year for the stock market during the Great Depression was in 1931 – and 1931 fits perfectly into the cycle.
As you can see from the above we have this pattern of economic crashes occurring approximately every 7 years so what should we make of all of this?
Photo courtesy of: socioecohistory.wordpress.com