The fear is we will be helpless this time.

"The current global expansion will likely continue into next year, given that the US is running large fiscal deficits. China is pursuing loose fiscal and credit policies and Europe remains on a recovery path. But by 2020, the conditions will be ripe for a financial crisis, followed by a global recession," wrote Prof N Roubini and B Rosa. Prof Roubini was labeled 'Doctor Doom' for predicting the subprime crisis in a speech at the International Monetary Fund in September 2006. People laughed at him at the time because the economy was doing well, but in September 2008 Lehman Brothers filed for bankruptcy, and the Great Recession followed. There are 10 causes for concern this time round. The fiscal stimulus of tax cuts in the US will run out by 2020, rising inflation will prompt the Federal Reserve to raise its Funds Rate, the Chinese economy will slow down, trade disputes will restrict the global economy, stock markets are too frothy, there will be a tightening of liquidity and central banks will not have the means for stimulating their economies because of "massive public debt". Although financial regulations have been tightened following the crisis of 2008 governments have encouraged banks and funds to increase their holdings of long term government bonds so that yields of these securities have fallen to very low levels, wrote Prof P Turner. Since the price of bonds is inversely related to yields banks and funds will suffer heavy losses if interest rates go up. Normally the price of bonds rises with increasing period of maturity because risks mount with time. This is known as the 'yield curve'. When short term yields are higher than on longer term bonds, the yield curve is said to have inverted, and this usually predicts a recession. The yield curve has become flat in the US. Former Prime Minister of Britain Gordon Brown warned recently, "We are in danger of sleepwalking into a future crisis." But, it was Brown who, as the Chancellor of the Exchequer, reduced regulations of banks which allowed them to engage in financial skulduggery. Record low interest rates maintained by central banks over such a long time has again encouraged financial engineering, wrote VA Nageswaran. "Leverage facilitates financial engineering, financial market speculation and unviable mergers and acquisitions." Emerging market risks have increased as enormous liquidity in developed countries has resulted in carry trades where speculators have borrowed in richer countries to invest in government securities in emerging market countries, wrote S Das. Although not warning of doom, Warren Buffett is not taking any chances and holding on to cash. Will Doctor Doom be right again? He has many supporters this time.