If you read us on a regular basis, you’d have probably heard that gold price tends to rise when other economics assets are plumbing. This is just basically a nice way of say that the gold market takes benefits of economic crisis.
How does a new economic crisis could happen again? Haven’t we just come out of the last one? You know, the one that started in 2008… Yeah, but the world economy was, is, and will always be a list of economic sectors that aren’t going to stay stable forever.
Let’s have a look at what The Economist magazine considers as the major risks for the world economy. Those are potential events that aren’t very unlikely to happen, the circumstances that they would need are already in place, they just need to detonate.
First, the smaller risks, if those fears were to become true then the economies of the implied countries would be heavily impacted, but this will not probably spread to global scale. Another reasons those events are consider to be too bad may be because some previsions aren’t that much likely to become reality:
- Energy crisis due to the low price of oil.
- Tension in south-China sea explode in a war.
- The Brexit happen for real.
- Economic union between emerging markets.
Then there are the major risks, that means those events are a greater threat to the global economy and they are more probable to happen. The effect would also probably last for a longer period. They rank from a “simple election”, wars, or just a sudden stop of growth:
- The terrorist threat is destabilizing the world economy.
- Election of Donald Trump as president of the United States of America.
- Exit of Greece from the euro, followed by a fall of the euro area.
- Implosion of the European Union due to internal and external pressures.
- Debt crisis in emerging countries.
- Hard landing of the Chinese economy.