- Off The Grid News - https://www.offthegridnews.com -

Report: World Economy Teetering On New Crisis

global economic crisis

image credit washingtonpost.com

Distrust in the financial system and the holding of cash proves that the world’s economy is still on very shaky ground, according to a new survey of people in the world’s 10 richest countries.

The Associated Press [1] report discovered that people in many different countries are afraid to spend and invest and are still hoarding cash because of the Great Meltdown of 2008. The AP’s reporters interviewed families and individuals in the world’s 10 richest countries and found that average people are now so risk-averse that they are afraid to invest, borrow and buy.

“People want to get as much distance as possible from the financial system,” economist Arne Holzhausen of the German insurance company Allianz said. “They want to be in control of their financial matters. People no longer trust the markets.”

New Behaviors that Could Lead to New Financial Crisis

The AP has detected new patterns of behavior that could delay recovery and set the stage for the next financial crisis. Many families and individuals are still on shaky ground and making financial decisions that put them in worse shape and greater risk for poverty.

New book reveals how to keep this “gangster” economy from murdering your money… [2]

These behaviors include:

The Illusion of Safety

The AP noted that: “A flight to safety on such a global scale is unprecedented since World War II.” The problem is that the safe instruments people are turning to are not really that safe.

Warren Buffett one said about bonds, the “safe” investment: “Bonds should really come with a warning label.”

Motley Fool writer Robert Baillieul [3] compared investing in bonds to “picking up nickels in front of a steamroller.” In other words, he says, the people who have fled stocks have actually invested in instruments that are potentially far more dangerous. Bonds provide an illusion of safety.

Why Recovery May Not Come

French spending hasn’t risen since 2007 and British spending is actually 3 percent lower than it was in 2007. Since consumer spending accounts for about 60 percent of the economy, that means little or no economic growth.

The picture painted by this survey is bleak and worrisome. The recovery around the world is uneven and not benefiting average people.

Hide Your Gold [4]