I was showing the progress of the stock market to my wife with a smile on my face and how the stock market had gone from 9986 in September 2010 to 12391 presently( a few days ago). However, my wife who has a Master's in Business Administration said, "That's not good, Fred! It's moving up too fast. I think we are in for a serious re-adjustment. I think a lot of people are going to get very upset when that re-adjustment happens worldwide."
That was the very first time that I thought seriously about it. So, when I applied my thinking to the problem at hand I could see several factors. I long have believed that the single event that caused the present economic crisis since about 2007 or 2008 was the Australian Drought that reduced food stocks so greatly worldwide. I have believed since then that this was the trigger mechanism for what I would call "The Greatest Recession" or the 2nd Great Depression (your choice). This lack of food bounced around the world and started a series of increasing panics that brought us to where we are now.
Also, since we had 130% of the grains needed to sustain the human race then and only 100% or less now with even less likely to be grown next year, the likelihood is that there will be a whole lot of starving unhappy people around the world overthrowing about 50% of the governments over the next 10 to 20 years worldwide because they don't understand economics and because if you are starving you will do almost anything to get food. This is just harsh reality. Nothing more.
So, is there another crash on the horizon? Maybe. But I see it as another temporary serious re-adjustment (At least for the U.S. and Europe). For the rest of the world the changes might indeed be more catastrophic than we are presently seeing in Northern Africa and China.
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