Despite the rather high rates of economic activity in 2019, experts from various reputable financial companies forecast a new global financial crisis in 2020, the largest in decades. JPMorgan was the first to publish their prediction about in this September. As you know, one of the largest and most authoritative investment banks in the United States uses its own calculation methodology. Bank experts believe that next year the world will experience disruptions in food supplies and riots as a result of a super crisis.
New global financial crisis in 2020
Bloomberg and UBS Wealth Management conducted their own research among fairly large investors whose fortune exceeds $ 1 million. They expect a drop in all exchange indices by at least a third, as well as a significant reduction in the value of shares and other securities before the end of 2020. In this regard, many of them transfer up to a quarter of their assets from securities and other high-risk investment instruments into cash money, precious metals and cryptocurrencies, those assets that will be in demand.
The keeping of your investments during the peak of the crisis in high-yielding bonds, stocks or goods may be fraught with the loss of a significant part of their value, and hence your money invested in them. In the event of the world economic crush, the demand for goods will fall, as well as their prices do, high-yield bonds will lose their liquidity, and the companies stocks will depreciate due to falling sales and the likely occurrence of difficulties in most types of businesses.
According to investors surveyed by UBS Wealth Management, the main geopolitical problem that will trigger the crisis is the US-China trade conflict. In addition, the US presidential election will contribute to high volatility in the stock markets. More than half of the respondents to the survey are going to strengthen the diversification of their assets, as well as increase the share of cash for which there will be increased demand in case the big new global financial crisis in 2020 still breaks out, as experts predict.
The levels of deregulation and financial innovation, the value of assets, the ratio of own and borrowed funds of the largest companies, as well as the duration of economic growth and the subsequent recession were taken into account when preparing the economic forecast for 2020.
In addition to economic factors, when making the forecast for the next year, experts took into account the human factor. Optimistic moods in the stock markets for quite some time have a more acute shock effect, which is exacerbated, leading then to panic moods with the onset of the financial crisis. In times of shock, people become less able to think rationally, thus succumbing to panic moods and only amplifying and accelerating the rolling wave of the new global financial crisis in 2020.
So the US dollar can significantly jump in relation to many currencies, especially to the currencies of countries that are hotbeds of new global financial crisis in 2020. At the same time, many currency pairs can collapse on the contrary. It is not yet possible to predict at what point and in which country a future economic explosion will occur. At the moment, you can only carefully monitor the appearance of signs and make available preparations so that the crisis does not catch by surprise in the wake of optimism.
In addition to these investment giants, Merrill Lynch, as well as Bank of America, also forecast a new global financial crisis in 2020. Demand for gold in the previous quarter already jumped according to data provided by the World Gold Council, which indicates the mood of wealthy investors and their desire to protect their assets from the effects of supercrisis .
Economic indicators this year have inspired many optimism about the future, but reputable financiers predict a powerful new global financial crisis in 2020. Learn more about this and how to respond to it if it happens