A finanacial crash is coming
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A finanacial crash is coming
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About this listen
The FTSE 100 and S&P 500 are near record highs. The real economy is deteriorating. And the Bank of England's Deputy Governor for Financial Stability, Sarah Breeden, has now said publicly what most politicians will not: a stock market crash is coming, and the financial system is not ready for it.
This crash could be worse than 2008 because of overvalued stock markets, the AI bubble, an overexpanded and at-risk shadow banking system and the Iran energy shock, which the International Energy Agency is calling the biggest energy shock in history.
If any of these risks crystallise simultaneously, and Sarah Breeden thinks they might, then the result will not be a market correction. It will be a financial crisis that will result in falling confidence, rising interest rates, frozen lending, job losses, and a domino effect through the real economy.
Governments must act now to plan for this eventuality and not after any crash happens. Contingency plans must exist, and nothing appears to be being done as yet.
If ever there was a moment to worry, even the Bank of England is saying this is it.