What is the next big event in relation to the 2008 sub-prime crisis that no one is looking at or even considering?

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by saystruethings

Student loans, China (in itself there’s probably another 1,000 problems), Social Security, or another major war.

Student loans: The recession of 2008 was caused by the housing bubble. I know so many people that have confided to me, “yea in 06-08 I couldn’t afford my house so I declared bankruptcy/my lawyer told me to stop paying bills and max my credit cards then declare bankruptcy”. Obviously student loans operate differently considering you can’t get rid of it. But in 1, 5, 10 years, if every debtor decides to not pay, or they get bad legal advice/protection, or laws change, there will no doubt be some serious economic turmoil. Depending on the amount of people involved, it could be much worse than the 08 recession.

China: They’ve had explosive growth. Whether that’s due to a huge economic boom, whether that’s due to the government intervening and inflating the reality of what china’s citizens can afford, it’s a threat. China was a nation of rice farmers 100 years ago. Now they’re a nation of laborers that don’t make much more than those rice farmers did, but they got capital, deals, a will, and potential. When the great depression happened, the US was/still are the economy. So there probably won’t be as big a loss considering China isn’t the top dog. But they’re #2, and they’re fallout, in any major regard, could have a serious impact on us.

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Social Security: It’s an old system designed for the past. It’s good, but too good for the current times, yet still not good enough to provide income to our seniors. The more we develop health care, the longer people live. The longer people live, the longer we pay out. The longer we pay out, the more we lose. Basically, the fund is running out of money because of the old system that is still in place. It’s not really sustainable and will eventually collapse if no one cares to fix it. Easy cause for a recession.

War: Hard to say that war = recession. War might actually increase certain stocks ironically. But it also means we not only attack nations with weapons, but with trade. Depending on who the war is with, we might shoot ourselves in the foot and turn friends into enemies, and lose big.

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Basically, there’s a lot of events that can cause a crisis. My personal opinion is student loans. We constantly have more college grads. We won’t have unlimited job growth. At a certain point, these college grads won’t be able to pay their loans off working part-time at Starbucks and won’t be able to find a job using their degree. I really think that will be the cause of the next crisis. But time will tell and I’d love to be wrong.

Regardless, you can’t let the thought of a crisis/recession/depression hold you back. If it does, either invest in precious metals, or be content with the idea that big capital losses are tax write offs for big capital gains in the future.

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