Global food crisis or a new world war? Will the economy crash again?
In previous crises, we saw that some essential products became much more expensive, including gasoline and some kinds of food. This impact generated inflation, or even hyperinflation: more money will buy less food, which could be another probable cause of the future crisis.
Here’s a story about this kind of situation, where food shortages can rise asset prices from South Korea to Middle East, from China to the United States:[sociallocker] A woman traveled hundreds of miles—from village to village and from town to town, in order to find some food to eat.
She arrived in my grandparent`s village. There, she desperately pleaded with the people there to sell her a bag of wheat that she would take to her children, who were dying of hunger. How much is 30 kg of wheat worth today? A few dollars. How much do you think she was offering?
A massive gold bracelet with precious stones in it. If you factor in the gold quota at the time, she was offering the equivalent of $500 for a little bit of wheat.[/sociallocker]
Yet nobody agreed to make the transaction! Why? Because in those times, wheat was more precious than $500. During a food crisis, all goods will end up being overpriced and the climate change will be colossal.
Another cause of the next financial crisis could be an attack on the main food supplies. The global economy will fall as well as the entire financial system, banking system and federal reserve of all countries, including South Korea, China, the United States, no one will escape. The New York stock exchange will drop while the unemployment rate will increase drastically. Banks all over the world will collapse, people will loose by assuming uninformed investment risk and no foreign policy will be able to protect them.
The scenario that Gene Roddenberry was addressing might be also a probable cause of the next financial crisis. In fact, in a modern state, it’s enough to destroy two components: the water supply and the power supply. Such an attack will also lead to shortages of food or goods. All these lead to higher unemployment rate, higher interest rates from banks, New York stock exchange drops, central bank collapse, economy climate change. International monetary fund will also be affected also in China as well as in the United States, while central banks will collapse one bye one leading to an inevitable global financial crisis.
It will also be sufficient to take advantage of a natural disaster with major impact over world economy. Imagine what it would mean if an extinct volcano erupts in Italy. The fall of the Italian economy would create a crisis throughout the entire Europe, which would in turn create a global financial crisis at lightning speed. No one would be able to get out of the way, not even China or the United States. The risk is immense and can affect over 1 trillion people by crashing the world economy in a very short period of time.
What about a World War?
Trump, Putin, North Korea, Syria… Need I say more? I don’t want to fall into apocalyptic prophecies, but if World War III happens, it will generate the destruction of resources and hyperinflation all over the world. And it might also destroy the entire economy system that we know today. Values established after World War II seem to no longer work. (The most obvious example is the issue of money without a gold coverage). The global economy has changes a lot over the years and obvious changes have been seen after each war or great depression. The climate change after each financial crisis is different, it affects the economy in a different way, the risk is not always the same. Still, there are a few things that are the same during financial crises, people getting fired, banks increasing their interest rates, food getting more expensive and foreign policy changing, while federal reserve being the most affected financial institution, next to central banks.
The great depression was tough, but prepare for the future financial crisis to be worse. The climate change will be so big after the food crisis will start and the financial crisis will occur that no international monetary fund will be able to avoid. Financial crises have a way of giving the strong ones some opportunities that they could rise above the water. Think about China that have managed to rethink their activity process and relocate people to other sectors of their business in order to diminish the risk of bankruptcy and get at the end of a great recession as winners. Food crisis is inevitable, and this will even occur earlier than predicted due to the COVID-19 pandemic that has already affected the worldwide economy starting with China. The risk of banks increasing interest rates is already here as banks offer to “help” people by suspending their loan rates for a few months, if necessary, but increasing their interest rates for after this period of time.
Moral values have been diverted or challenged, as the very system established by World War II winners is challenged. Therefore, in the event of a new planetary conflict, it is possible that our whole system of values will collapse, along side the economy. This could be another possible outbreak of the financial crisis.
The money might not even matter. As you can see above: It is possible to return to a natural economy, based on real resources and exchanges, while the federal reserve will go out of money, along site banks world wide. It is one of the most important opportunities of the next financial crisis, which we will discuss in a later article. It’s another key to taking advantage of opportunities and prospering during a financial crisis![sociallocker]Make no mistake that banks will increase their interest rates even more, federal reserve will get to the bottom of their pocket and the climate change of the food crisis will prepare the therein wisely for the financial crisis to come. People will be in debt to banks so much, that the financial crisis will bring them on their knees and the economy as we know today will change drastically, as the entire financial market. Federal reserve will be down for a long period of time after this crisis and people will need to find different ways to survive and prosper.
Only 20% of people are aware of the impact the financial crisis will have on their lives, are you one of them? If the answer is no, you need to get ready fast, as the financial crisis is knocking on our doors!