Saturday, August 20, 2022

The World May Be About To Face A Big Shock

While it is difficult to be ready for change, we should try to be diligent and remain ready. The reality is that when change does occur, it may come fast and furious. The big shock is rooted in the speed things can unravel in our modern world. People tend to discount risk after years of hearing warnings of doom that fail to materialize. An example of this is the resilience of the stock market here in America as the Fed raises interest rates.  

In a recent video Robert Kiyosaki author of “Rich Dad Poor Dad,” and Raoul Pal warn about the great reset of 2022 in the world economy. This includes several scenarios of how things might play out. Many of the references to similar past periods throughout this video, help cultivate a better understanding of today’s macroeconomic environment & trends. The video refers to how the IMF recently painted a picture of a world economy that promised slow or no growth. The IMF implied there was little hope as it stated the world economy is heading into the worst economic headwinds since World War II.

It Is Kinda Like This!
Most people are so busy dealing with the events occurring in their everyday life they take little time to consider how things happening around the world and in the economy will affect them. Other than natural disasters and war, demographics, inflation, shortages, and changing consumption patterns all play into the world we will face in the future. One of the areas where many investors and the public at large could be discounting the risk to the economy as the Fed moves into quantitative tightening.  

As Liquidity Goes, Economy Could Free Fall
The true effect of quantitative tightening has yet to hit most markets or Main Street. When QT kicks in liquidity will rapidly fall. This is a factor that will be felt around the world. It will hit first in the most speculative markets such as commodities and expand outward from there. The lack of time to adjust and alter both our lives and investments will spell doom for millions as defaults become common. When people feel less flush, they pull back and reduce leverage, many even stop paying on debt. This can set in motion a self-feeding loop or cycle that can rapidly accelerate.  

With the IMF's view of the economy in mind, it is important to note, that risk abounds. One of those risks is that, whether we are talking about Democracy, Communism, Socialism, or Fascism the strong link they share is one of dominance and a desire to control. We are currently witnessing some of what I'm writing about now happening in China. The combination of additional unbridled spending and new programs focused on controlling the masses by administering programs geared to curb social unrest is not appealing. Sadly, this is what we may see if things slip into chaos. Again, the real shocker is just how fast this might unfold. 


Here is the link to the video mentioned above;

(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)


  1. On August 23, three days after this post, Ray Dalio released a new video. Dalio has studied the last 500 years of history and economic cycles. In the video, he explains how the big cycle works, and what lies ahead for the U.S. & the existing world order. He thinks we face big changes. These may come about very fast. The link to that video is:

  2. The guesses, that mainly Raoul Pal makes, are just that - guesses. As for Kiyosaki's "all cycles go up. It is approximately the age of a human being 20 years,20 years,20 years", he mistakenly conflates - as does Dalio in his video - discrete,specific, in the past, trigger events, with "cycles".
    Yes, it looks like potentially huge global economic upheaval is a certainty, and NO-ONE knows how that will play out.
    So much speculation thrown in with a few facts/data and a pinch of nonsense, in both videos.

  3. Pascal, what you say is valid, however, the issue I want to highlight is how rapidly things may fall apart. I do not agree with several of the points they raise. Also, thanks for the comment.