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The Biggest Problem For The Global Economy In 2019

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by , 12-31-2018 at 08:07 AM (258 Views)
      
   
The biggest problem for the global economy in 2019 will be massive business failures. Perhaps bank failures, too.

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On the demand side, the end of free money will make it difficult for consumers to take on more debt. On the supply side, it could push low-profit business off the cliff.

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Simply put, the end of free money is setting the global economy into a vicious cycle of slower growth. Less consumer debt could fuel less spending. And less spending could fuel waves of business failures.

Thatís what happened in 2008-9, shortly after the Federal Reserve raise interest rates and the US economy slid into a recession. US Business failures soared to 6,000 per quarter, while bank failures reached 157.

Compounding the problem this time around is the rise of anti-globalization ideologies around the world, which add to pessimism for the state of the global economy in 2019.

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