Is a new financial crisis brewing? After Bill Gates, this economist warns of 2008-like crash

By: | Updated: April 25, 2018 9:28 PM

The global financial market might be sitting on ticking time bomb, which could soon lead to another 2008-like crash, this economist has warned after Bill Gates, Warren Buffett.

Is a new financial crisis brewing? After Bill Gates, this economist warns of 2008-like crashThe global financial market might be sitting on ticking time bomb. (Reuters)

The global financial market might be sitting on ticking time bomb, which could soon lead to another 2008-like crash, economist Douglas Diamond has warned. The Chicago University professor, in his research, has observed that “credit, or liquidity, was once again being granted too liberally” as before the 2008 crisis, the Independent has reported.

The “seeds are being planted” for the next financial crisis, he told the British paper. The financial crisis in 2008 led to the Great Recession which rendered 8.8 million people jobless just in the United States, while its repercussions were felt worldwide. In an AMA (Ask Me Anything) session on Reddit recently, Microsoft’s Bill Gates made similar observations about the financial market, saying that a stock-market crash is a certainty.

Bill Gates did not predict a timeline for the crisis to come. Interestingly, he endorsed Warren Buffett’s analysis of the financial market. The Oracle of Omaha did not predict a financial crisis but he did say that a majority of investors are “all but fearful”, and this could lead to a heavy correction in 2018.

It is noteworthy that the year 2018 began with a massive global sell-off. The S&P 500 Index dropped more than 1%, ending February with a decline of 3.9% in one of the wildest months in years, Bloomberg reported.

Meanwhile, Former Bank of England Governor Mervyn King too warned of financial risks and said that a buildup of debt needs to be more “closely monitored” to ensure it doesn’t “spark the next financial crisis”. “The areas of weakness in the current system are really focused on the amount of debt that exists, not just in the US and UK but across the world,” he said on Bloomberg radio.

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