Experts know it's coming, but from where?

Another financial crisis is surely going to come, especially after a recovery which has lasted since 2008, wrote U Mukherjee. No one can predict when it will strike or what form it will take but come it will because, "Greed is at least as powerful a force as fear; it plays tricks with our intellect." Currencies of Turkey and Argentina are in trouble, there are financial problems in Sweden, falling house prices in Australia and trade tensions between the US and China. Or social stresses because of rising inequality could be the next trigger. "The biggest worry, whatever the cause of the next crisis turns out to be, is that there are far fewer arrows in the quiver to fight it this time." The global economy is slowing down, as shown by the JP Morgan Global Composite Purchasing Managers' Index (PMI) which came in at its lowest level in two years, wrote M Chakravarty. The US PMI showed solid growth but weaker than previously, but prices are rising which will force the Federal Reserve to tighten their Funds Rate. A report by the Reserve Bank of India on monetary policy noted that global economic activity has been resilient so far but there are signs of volatility in financial markets. "More ominously, global trade growth has begun to slow down. Inflation outlook has deteriorated in many AEs (advanced economies) and EMEs (emerging market economies). These developments taken together will pose a major challenge to global growth prospects in the coming quarters and years." There will be a recession by 2020, wrote N Roubini and B Rosa. The US economy will start to slow, as the present stimulus wears out, and rising prices will force the Fed to raise rates. Add trade wars, tensions with Iran and a lack of liquidity, as central banks tighten monetary policy, then a recession, even a stagflation, in the US becomes a distinct possibility. The crisis in 2008 was due to financialization of the global economy which was based on excessive debt and economic growth being driven by financial markets, wrote VA Nageswaran. So, what about today? "We stand where we stood in 2008. The rise of finance has not been curbed." "Leverage facilitates financial engineering, financial market speculation and unviable mergers and acquisitions." During 2014 to 2016 the global economy declined, inflation fell and markets fell everywhere. However, the S&P 500 remained the same. "There are reasonable grounds to suspect that the US had fudged data from 2014 to 2016 to prevent official data from showing an economic recession and that the stock market too was manipulated," wrote Nageswaran. The world has been riding a tiger for the last 10 years. No one knows how to get off.