Why 2018 will be the year of the next financial crisis

The next financial crisis

The markets have been on an incredible high pretty much ever since the financial crisis in 09.  Around 2014 I started feeling a bit itchy, – everything is going too well. I have since become more and more convinced that the next financial crisis is just around the corner. This is why I believe next year will be the year of the next crash.

1 Unstable markets and the rise of cryptocurrencies:

More and more money is being invested in cryptocurrencies of different sorts. After the bitcoin boom late last year multiple other (less legitimate) cryptocurrencies have started to rise. The investors are less and less high risk traders and hackers and more and more our next-door neighbors. This means that if (when) these cryptocurrencies loose their value or becomes more regulated, it will affect normal people with average saving margins, thus exposing them to a lot of risk (= creating more volatility on the market and setting it up for a crash).

2 Time

Everything that goes up has to go down. It is simply not realistic to have a market trending upwards without any significant (smaller 10-percent little dips doesn’t really cut it) break to it in so many years. Everything that goes up will at some point in time have to go down (and at some point up again).

3 The mass effect

There is too much instability in the world right now to not expect it to take a larger toll on the financial markets than it has. A lot of people are starting to pull their investments out of the markets and into savings accounts, and when enough people do this, it will show in the larger indexes which in turn will confirm others suspicions of an upcoming recession and then incentivize them to also withdraw from the markets, creating a downward spiral.

 

What is your take on this? Are you also preparing for the next financial crisis to happen soon?