Coming World-Wide Banking Crisis

[Pinkieslut]

1. Europe collapse (from Derivatives) ...
2. US collapse (Junk bonds and default on debt) ...
3. PRC collapse (Corruption, asset bubble burst) ...
4. Japan collapse (Zombie companies/banks, world's highest public debt) ...
5. Saudi Arabia (Corruption, collapse in oil price, cash running out) ...
6. Russia (Same as Saudi) ...

And ...
Singapore - overhung with commercial/residential properties, mostly dead SME businesses, MNC salaries earned mainly by foreigners (flowing out of funds). Many of the asset bubble is funded by the cheap loans coming from US, Japan, Europe and PRC.

Matter of time.

 

[MadrigalWheel]

I would like to add another to the list where many have neglected:

7. The cashing out of baby boomers assets in the hands of their inheritors or themselves that will leave a huge debt or liquidity crisis on the disproportionately small population of GenX.

If you think about it all your 6 points above have one thing in common, that demand (and therefore consumption of commodities) has come to a point in which it cannot support current prices. Even if one says that the prices are due to speculation, speculation itself is the aggregate sum of money being poured into the market via leveraging a base level of asset pricing to maximise rate of return. So the more baby boomers cash out to retire, the smaller base of assets there is for the market to leverage on and therefore lower support pricing.

And the more base assets there are to leverage on, the more risks one has to take in what I see as a vain attempt to uphold yield. The more risks there are therefore, the higher the volatility and therefore more and more severe boom and bust cycles in the absence of new upcoming economies (e.g. - India, South America, Africa?) to create consumption and support the demand side of the equation.

So maybe it does make sense, even however morbid, that undertaking, retirement homes, hospices and death related industries might be the very next blue chip industry one should start investing in for the next 20 years or so.