With there being concern in the US that the banking system might come apart, although the Federal Reserve has stepped in to try and plug the hole in the sinking ship. So, maybe the panic that has started, leading to bank runs, can be stopped, so the chain reaction does not occur. But, even so, there is another dire prediction of the stock market collapsing in a mere 60 days. That has been made by Larry McDonald, leading financial analyst. It is not easy to summarise his view, but in short, he gives a doomsday summary of an over-heated, misfiring economy, that is set to suffer a burn out. Rising interest rates and a credit squeeze, will further impact upon the middle class. "Auto loans right now are approaching 14%, almost 20% of auto loans are one thousand a month, and so the middle-class families are getting hammered here," the expert McDonald said. "So, the consumer pressures are violent, but on the high end, the wealthy are doing well with excess savings and higher interest rates."
We will wait and see how this evolves, but certainly if this crash prediction is true, Australia faces the same cascading collapse, so it would be a good idea to put away a few extra tins of baked beans.
