Introduction
As the global economy continues its long recovery from the financial crisis of 2008, it’s worth considering where we’re headed next. In this post, I’ll discuss why a recession is likely to hit soon, what makes this recession different from others in history and how you can prepare yourself for it.
Here’s Why
The next global financial crisis is coming. Here’s why:
- Global growth is slowing down. In the past few years, we’ve seen a decline in global economic activity—and it’s not just Europe that’s affected by this trend; the U.S., Japan, and China have all experienced slower growth than expected since 2016. While these countries are still growing at their historical levels (and even higher than they were before 2008), many fear that this trend could lead to another recession if it continues for much longer.
- Inflation is rising globally too—but nowhere as fast as most people expect! According to IMF data released last month, inflation expectations rose from 1% at the beginning of 2018 to 2% by mid-year 2019, 3.23% in 2020, and 3.4% in 2021! This means that if inflation keeps rising further during 2022/2023 then there will be pressure on governments all over again which could cause another financial crisis like those experienced during 2008/2009 where markets crashed due to cheap credit and lax lending standards that fueled a housing bubble.
What’s Different?
The global economy is entering 2023 in a weaker position than previously expected, as we are now looking at 2.5% growth rather than 3%. This means that the next global financial crisis or recession is going to be ugly and painful. In fact, it may not even be called a “recession.” Instead, it will be referred to as “the Great Recession” or simply “the Depression.”
Private equity companies have been around for decades now; they have grown from their beginnings as hedge funds into large financial groups with billions of dollars under management (BAM) globally. Many of these firms started out doing good business but later turned bad due to their greediness—they focused too much on making money instead of paying attention to risk management and how much money they were spending every year on expenses versus returns generated by investments made during those same years (i.e., there was no correlation between how much money one person earned vs another). When this happens over time then things start going downhill fast because eventually everyone loses confidence in those who failed first before showing any signs of improvement whatsoever!
The Source of the Problem
The IMF’s projections for 2022 are 2.4% growth, down from its previous forecast of 2.6%. The organization also reduced its 2019 growth forecast to 2%, compared to 2.2% previously predicted.
In a press release sent out on October 19, the IMF said that “the global economy is entering 2022 in a weaker position than previously expected.” It went on to say that “the projected slowdown reflects weaker activity in advanced economies and emerging markets alike following recent Fed policy changes.”
So, Here We Are
The global economy is in a crisis or recession, and it’s going to be worse than the previous one. This is not a surprise; we’ve known for some time that our economic growth model was broken. But now we’re starting to see how bad it really is—and what it means for us as individuals and as a society.
We’ve seen this crisis movie before: in 2008-09, we were told by experts that the world economy would grow steadily until 2020 or 2025 (or maybe even later), but then there would be another crisis like 2008-09 (or maybe even worse). And they were right! It happened again—but not quite so quickly or dramatically than before: instead of being hit with a double-digit decline in GDP by 2020-2025 as many had predicted earlier on this year…we’re now looking at something closer to 20% over three years instead than five years.”
Here’s What They Don’t Know
The global economy is entering 2022 in a weaker position than previously expected, the International Monetary Fund (IMF) announced, Global Investment Committee Weekly report from June 27, 2022, “Inflation-Driven Recessions are Different.”
The IMF said that it expects inflation to remain below target for the next five years and that this could lead to higher rates of unemployment and slower growth than forecasted by other institutions like the World Bank or Organization for Economic Cooperation and Development (OECD).
So, What Now?
The next financial crisis will likely be triggered by a combination of factors: global trade wars, rising interest rates, and a possible recession in the U.S. The good news is that there are ways to prepare yourself for this event and protect your portfolio from being hurt by it. Here are three steps you can take today:
- Stay calm and stay invested. Staying invested will help you preserve capital during tough times, but also keep your mind focused on long-term goals like retirement or paying off student loans early (and maybe even buying a house). If you’re worried about how much money you’ll need in retirement someday soon—or if this article has caused some existential dread over whether or not we’ll reach our goal—don’t forget about diversification! You may have heard that diversified portfolios are more likely than not going to outperform less diverse ones; however, some studies have shown otherwise (although they do recommend keeping at least 50% allocation). Regardless of which option works best for YOU personally though; just make sure whatever investments/portfolios/strategies work best fit YOUR needs first before making any changes!
- Look into opportunities outside traditional markets such as emerging economies like China where growth has been relatively stable over time thanks largely due its large population base supporting demand for goods/services worldwide which means prices tend to remain steady regardless how volatile international politics gets sometimes leading us here currently where things seem pretty quiet compared with previous years’.
So, Where Am I Wrong?
The global economy is entering 2023 in a weaker position than previously expected, the International Monetary Fund (IMF) announced. Global private equity companies are in it for the long term and will continue to invest in their target companies until they reach their goal of profitability or exit. The investment committee weekly report from June 27th says that “investment decisions have been made on behalf of clients with an average holding period of 5 years as per our mandate” – meaning we can expect more volatility coming up in 2023 and beyond because these investments need time before they pay off!
How Will It End?
The next global financial crisis or recession will be ugly. It will be worse than the last one and a lot like that one, but not as bad.
That’s because the next crisis or recession will be a lot like the one we just had. The similarities between now and 2008 are actually much more striking than the differences.
There are some important differences of course. For instance, the U.S. economy is much bigger now than it was in 2008 and we’ve had a lot more experience with this kind of thing. But on the whole, I think these similarities are more important than the differences when trying to predict how bad things will get this time around.
What Can You Do to Prepare?
You can’t predict the future, but you can take steps to prepare for it.
If you are concerned about your financial future or crisis and have some money saved up, consider investing in a long-term investment such as bonds or stocks. This will make sure that you’ll be able to cover any shortfalls if there is an economic downturn. The best thing you can do is make sure that your family has enough food on hand so they won’t be forced into buying fast food when times get tough again. Also, make sure they have a place where they can go if their home gets flooded or damaged by natural disasters like flooding or hurricanes because these types of events tend not only to cause damage but also result in loss of life too!
The next global recession is going to be ugly
The next global recession is going to be ugly. It’s not just that we’re entering a period of economic weakness, and it’s not just that we’re entering a period of low-interest rates, but there are other factors at play here:
- The next global recession will be worse than the last one. Inflation is back in vogue again—and with good reason! The world economy has grown faster than expected since 2009 thanks primarily to massive amounts of stimulus from central banks around the globe.
Conclusion
The next global financial crisis is inevitable. With the current economic and political climate, it’s only a matter of time before a major recession hits the world. We need to prepare for this by taking measures that will protect our personal finances and help us cope in times of hardship.
There are many ways to do this, but one thing is certain: you must begin preparing now!