The Otium Post

The Otium Post


Biggest market crash in HISTORY is coming as HUGE debt bubble bursts, top investor warns

Biggest market crash in HISTORY is coming as HUGE debt bubble bursts, top investor warns

NOW is the most dangerous time EVER to be an investor, as a giant bubble could be about to pop and derail the world's financial system, a financial expert has warned.

PUBLISHED: 15:20, Mon, Sep 19, 2016 | UPDATED: 16:22, Mon, Sep 19, 2016

'Central banks have created a huge debt bubble'

Since the financial crisis market bubbles have been created by the world's central banks, which have flooded markets with money in the hope of stimulating an economic recovery, according to Michael Pento, president of Pento Portfolio Strategies (PPS).

But now this bubble is set to burst, which will mean the total collapse of financial markets across the world, the wall street expert warned. 

The predicted crash is set to be so severe that there will not be a single asset that is safe, with even the value of diamonds and sports cars completely decimated, according to Mr Pento.

He said the current financial conditions are "the most dangerous markets i have ever witnessed in my entire life - and i've been investing for over 25 years… The membrane has been stretched so wide and so tight that its about to burst."

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Michael Pento says it's a dangerous time to be an investor
It comes as global central bank balance streets have gone from $6trillion in 2007 to $21trn today - and they are still being expanded at the pace of $200billion every month, according to Mr Pento. 

The Bank of England, the European Central Bank (ECB) and the Bank of Japan are among the institutions that this year have kept printing money through Quantitative Easing (QE) programmes that involves buying the bonds - or debts - of governments and investment grade companies. 

This has pushed up bond prices higher and higher, while yields - or payouts - have dropped to record lows.

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There are 1810 billionaires worldwide and according to Forbes 2016 rich list, Bill Gates is still the richest person on the planet, along with Bill, here are a few others on that all-important list.
1. Bill Gates - $75 billion: Co-founder of Microsoft, Bill dropped out of Harvard University and became the richest man in the world
2. Amancio Ortega - $67.1 billion: The 79 year old from Spain owns Zara
3. Warren Buffett - $60.8 billion: The 85-year old invester bcame a billion in 1990 after investing in Coca-Cola
4. Carlos Slim Helu- $50 billion: Carlos is the owner of Telecom
5. Jeff Bezos - $45.2 billion: American Jeff, 52, founded Amazon in 1994 from his garage
6. Mark Zuckerberg - $44.6 billion: The Facebook developer has pledged to give away 99% of his fortune
7. Larry Ellison - £43.6 billion: The 71-year old is the executive chairman and chief technology officer for Oracle
8. Michael Bloomberg - $40 billion: Founder and chief executive of the finanical news company of Bloomberg. He also served as the New York Mayor 2002-2013
9. Charles Koch - $39.6 Billion: Charles, 80, co-owns Koch Industries with his borther David
9. David Koch - $39.6 billion: David, 75, is the vice president of Koch Industries
10. Liliane Bettencourt - $36.5 billion: Liliane, 93, is the founder of L'Oreal and one of the most powerful women in the world
12. Larry Page - $35.8 billion: The sucessful 42-year old in the co-founder of Google
13. Sergey Brin - $35.2 billion: The Russian computer expert is a co-founder of Google 
14. Bernard Arnault - $32.7 billion: The 66-year old owns LVMH
15. Jim Walton - Jim Walton is the chief executive of Arvest Bank Group Inc, which owns Walmart.
17. Sam Robson Walton $32.5 Billion: The 72 year old served as chairman for Arvest Bank Group Inc, which owns Walmart, between 1992 and 2015
Alice Walton - $30.9 billion: Alice is the daughter of Sam Waltonm founder of Walmart
18. Christy Walton $29.6 billion: Christy is the widow of John Walton who was one of the sons of Sam Walton, Walmart's founder
19. Li Ka-shing - $28.6 billion: Li Ka-shaing is said to be the richest person in Asia
20. Wang Jianlin - $26.4 billion: Wang is the chairman of the Dalian Wanda Group


Phil Knight is the co-founder of Nike and is worth $24.9 billion
George Soros is a billionaire investor worth $24.5 billion
Steve Ballmer was chief executive of Microsoft, owns LA Clippers and is worth $23.9 billion
Jacqueline Mars, granddaughter to Frank C Mars, is worth $23 billion
John Mars, grandson of Frank C Mars, is worth $23 billion
Confectionary giant Forrest Mars is worth $23 billion
Jorge Paulo Lemann made his $23.8 billion through Garantia
David Thomson, chairman of Thomson Reuters Corp., is worth $22.8 billion
Sheldon Adelson made his money from casinos and is worth $22.5 billion
Mukesh Ambani worth $22.3
Lee Shau Kee worth $22.2 billion
Maria Franca Fissolo worth $21.8 billion
Jack Ma made his $21.8 billion fortune through e-commerce
Leonardo Del Vecchio, with Giorgio Armarni, made $21.2 billion fortune from Sunglass Hut
Stefan Persson is the owner of H&M and is worth $20.8 billion
Carl Icahn founded Icahn Enterprises and is worth $18.5 billion
Michael Dell made his $18.4 billion fortune from Dell computing
Paul G. Allen is the co-founder of Microsoft and is worth $17.9 billion
Beate Heister and Karl Albrecht Jr, co-founders of Aldi, are worth $17.7 billion
Susanne Klatten made her $17.5 billion from pharmaceuticals and BMW
Anne Cox Chambers was a director of Coca-Cola Company and is worth $17.3 billion
Dhanin Chearavanont is a food businessman worth $17.2 billion
Tadashi Yanai owns Fast Retailing $17.2 billion
Laurene Powell is the widow of Steve Jobs and is worth $17.1 billion
Ma Huateng is the Chief Executive of Tencent Inc, one of China’s largest online companies, and is worth $16.8 billion
Len Blavatnik, with Rita Ora, from America, is worth $16.6 billion
Prince Alwaleed Bin Talal Alsaud is Saudi billionaire worth $16. Billion and co-founder of Kingdom Holding Company
Theo Albrecht Jr is the son of Aldi’s founder and is worth $16.1 billion
Stefan Quandt is German.serves as a supervisory board member at BMW, worth $16 billion
Azim Premji made his money in software and is worth $16 billion        
Michael Otto, with his wife Christi,fortune from retail -real estate and is worth $15.9 billion
Dilip Shanghvi made his money from pharmaceuticals and is worth $15.9 billion
Ray Dalio is the founder of Bridgewater Associates and is worth $15.7 billion
Donald Bren worth $15.2 billion 
Serge Dassault is a French aviation businessman worth $14.8 billion
Srichand and Gopichand Hinduja own various banks, media groups and energy firms, worth $14.5 billion
Aliko Dangote is the richest man in Africa through his cement company Dangote Industries and is worth of $14.3 billion 
Dieter Schwarz owns Lidl and Kaufland and is worth $14.2 billion
James H. Simons is a billionaire star of mathematics,private investment worth $14 billion
Cheng Yu-Tung from Hong Kong is worth $13.9 billion
Charles Ergen owns Dish Network, is worth $13.9 billion

It means some corporate bonds - or debts - are now trading with negative yields, which means that investors are essentially paying to lend money in the hope the debt price will keep rising. 

Mr Pento has now warned that when policymakers signal they are set to stop buying, which will stop bond prices rising, there is going to be a devastating crash - not just in bond markets but across all investment assets. 

He said: "When the bond market breaks, when that bubble bursts, it will wipe out every asset, everything will collapse together… I mean diamonds, sports cars, mutual funds, municipal bonds, fixed income, reits, collateralised loan obligations, stocks, bonds - even commodities - will collapse in tandem along with the bond bubble burst."

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Mr Pento argues that central banks should have allowed house prices and stock prices to take their natural course during the financial crisis. 

He said: "I think 2008 was just a preview of what's going to happen. 
"If we allowed markets to repair themselves in 2008, in other words, if we allowed home prices to fall and, stock prices to fall and interest rates to rise, and debt levels to contract, then we would have had a depression for a few years, at the most. 

"But then we would be able to come out of that with stable money supply, stable interest rates, stable currency, low debt to GDP ratios, high productivity rates, massive capital expenditures, and a nice healthy growing economy. 

"But none of that has been able to occur.... 

We are in a very bad situation..and this is not going to end very well."


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