Financial experts are not exactly sunny on the future of the American economy. There have been several reports focusing on certain foreboding economic factors, such as massively skyrocketing household debts and student loans, that could result in a crash some experts believe could be “worse than the Great Depression.”
Goldman Sachs, one of the world’s largest financial institutions, predicted the American financial outlook for this year would be “not good,” and reported that household debt in the United States has been steadily rising since the 2008 housing crisis and financial crash forced American taxpayers to bail out many of the big banks.
There is currently $247 trillion in global debt, which could trigger a catastrophic financial crash at basically any time. In the United States, this isn’t helped by low, stagnant wages and the rising national debt, which will drag down the economy before long.
Positive current financial state not indicative of the future
At the moment, there are some positive indicators in the economy, such as increasing business confidence and low unemployment rates. However, most economists believe these indicators will not last through the rest of President Donald Trump’s first term, meaning a downturn could kick into gear even before the end of 2020. Some experts have predicted that the lower levels of car and house sales were the first steps toward a new American recession.
One researcher from Elliott Wave International said in an interview with the New York Post, “We think the major economies are on the cusp of turning into the worst recessions we have seen in 10 years. Should the economy start to shrink, and our analysis suggests that it will, the high nominal levels of debt will instantly become a very big issue.”
Other experts have noticed warning signs in some economic markers that have been rapidly getting worse over the last decade. Perhaps the most noticeable of these is household debt—the current level of household debt in the United States is $13.3 trillion, which is significantly worse than it was during its peak in 2008, mostly because of mortgage lending.
Student loan debt could very well be the primary cause of the next big financial crash. Outstanding student loan debts have gone from $611 billion in 2008 to $1.5 trillion today, more than doubling in that time. Car loans are currently sitting around $1.25 trillion, which is far past where they were in 2008. Unpaid credit card balances are currently about as high as they were in the time leading up to the Great Recession that followed the 2008 crash. Finally, central bankers have significantly increased the global debt, which now sits at $247 trillion, versus $177 trillion in 2008.
All this being said, it is extremely important for Americans to keep an eye on the state of the market and figure out how best to proceed with their investments. Investing in gold might be one of the best strategies to mitigate the potential damage caused by a crash that will inevitably happen at some point—it’s just a matter of when. To learn more about gold investing, reach out to Gold Wealth Financial today.
- by Steve Hunt
Categorised in: Gold Investing