Is it probable that another financial crisis and global recession will occur?

by | Aug 14, 2023 | Recession News | 42 comments




‘It’s really bad that central banks have pursued these whiplash policies which have undermined the stability of the global economy.’

Professor Patrick Minford and Vicky Pryce join Michael Portillo to discuss whether a global recession is upon us.

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Is another financial crisis and global recession likely?

In the midst of a global pandemic and economic uncertainty, the question of whether another financial crisis and global recession is likely has become a topic of concern for economists, policymakers, and individuals worldwide. While no one can predict the future with certainty, several factors provide insight into the current state of the global economy and the potential for another crisis.

First, it is crucial to acknowledge that the world has experienced financial crises and global recessions in the past. The most recent example was the 2008 financial crisis, triggered by the collapse of the subprime mortgage market in the United States. This crisis had worldwide consequences, leading to a significant economic downturn that took years for many countries to recover from fully.

The current COVID-19 pandemic has presented unprecedented challenges to economies worldwide, often being compared to a financial crisis on its own. Governments globally have implemented strict lockdowns and restrictions, leading to a substantial decrease in economic activity. Supply chains have been disrupted, businesses have faced closures, and unemployment has skyrocketed, all contributing to the potential for a global recession.

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However, several factors distinguish the current situation from previous financial crises. One significant difference is the involvement of governments and central banks. Governments worldwide have implemented aggressive fiscal and monetary policies to counteract the economic impact of the pandemic. These measures include stimulus packages, tax breaks, and emergency loans to businesses and individuals. Central banks have also played a prominent role by cutting interest rates to stimulate borrowing and providing liquidity to ensure the smooth functioning of financial markets.

This coordinated response by governments and central banks has provided a considerable level of support to prevent a deeper economic downturn. These interventions aim to stabilize economies, protect jobs, and maintain consumer and business confidence. The impact of these measures may mitigate the severity of a potential global recession.

Another critical factor is the resilience and adaptability of the global economy. Over the years, countries have learned from previous crises and implemented regulatory measures to strengthen their financial systems. These reforms have been designed to prevent excessive risk-taking, improve transparency, and increase the stability of the global financial architecture.

Furthermore, advancements in technology and globalization have enabled countries to diversify their economies and reduce dependence on specific sectors, minimizing vulnerability to economic shocks. The rise of digital economies, e-commerce, and remote working has allowed businesses to adapt more rapidly to changing circumstances, facilitating economic recovery.

However, challenges remain that could potentially lead to another financial crisis and global recession. The duration of the COVID-19 pandemic and the effectiveness of containment measures will play a crucial role in determining the length and depth of any economic fallout. A significant concern is the potential for a prolonged recession due to a slow recovery in certain sectors, such as travel, hospitality, and retail.

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Moreover, the high levels of public debt incurred by governments to finance stimulus packages could pose long-term risks to economic stability. If left unchecked, this debt burden may lead to financial imbalances and a potential loss of investor confidence, triggering a crisis.

In conclusion, while the risk of another financial crisis and global recession cannot be dismissed, the current landscape differs from previous crises in terms of government intervention, global economic diversification, and technological advancements. The measures taken globally to combat the effects of the COVID-19 pandemic provide a degree of confidence in mitigating a severe economic downturn. However, uncertainties surrounding the duration of the pandemic, sector-specific recoveries, and public debt levels remain, making it essential to continue monitoring the situation closely to mitigate the likelihood of a future crisis.

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42 Comments

  1. Seán O'Nilbud

    Minford is a dimwitted traitor.

  2. Micheal Salinas

    I feel one Of the greatest challenges that we first timers face in the ma rket is that we end up losing all we have,making it difficult to find ourselves back to our feet. My biggest advice is to always seek the services of a professional just like I did when I ventured into it for the first time. Big thanks to Jasmine Querida. I now make huge profits by weekly through his services while still learning to stand on my own.

  3. Dodger Boe

    All Engineered By Design …. Digital Control by the Big Bank of Corruption .. City of London Rothschild Cult wants global Debt system tightened under One Roof !

  4. Richard Jones

    "We've seen the inflation issues partly because of coming out of Covid and also of course the war in Ukraine … that scenario could not have been predicted" – so not the £370bn of QE since 2020 to pay for lockdown, then? That's not a factor? Oh OK…

  5. Joseph Lee

    My greatest concern is how to recover from all these economic and global troubles and stay afloat especially with the political power tussle going on in US.

  6. Max Smith

    How could it just be as a result of Trump's policies if banks are failing across Europe as well?

  7. Erik P.T.

    I was onboard until the mention of 'Trump' like… really? It's the banks duty to honor their promise.
    The other economist experts were cordial and not as 'screaming political activist'.
    As an American bruh… I came to see economic reception not to be yelled at by what appears to be another… maybe scholar? C'mon show some manners next time.

  8. Med M

    The bigger war is knocking the uk door. Ukrainian involvement issue

  9. Med M

    Absolutely UK have the worst policy of the world the policy of the UK, the British Great Britain is go tomorrow war in Afghanistan in Iraq immediately and kill lots of innocent people dying to the wall next day. How are having weapons of mass destruction, Mr. Tony Blair where are you Mr. George Bush hello

  10. James Burke

    this is precisely why I bore people about the frequent interventions I've made in accounting exercises which culminated in highlighting operational dysfunctionality as well as recoverable assets

    95% of management are either operational vandals or mor ons or both, such as at IQEQ and the big 4

  11. cup of Tea

    Patrick Minford caused a holocaust in poor areas with his Truly disgusting policy's.

    Never Trust these economics ppl .
    Very two faces
    Pure liars

  12. Patricia Carlos

    Recession is most likely the result of an external factor. For the first time in decades, the United States is losing its clout as a federal reserve currency. They don't have any more economies to use to control inflation, and less money is being spent on stock and oil trading than in the past. They all lend support to the idea that a new multilateral world order is in the works.

  13. doctor

    there fucking idoits this isn't a crash or a recession

    this is economic collapse

  14. B B

    Banks are fine

  15. Peter Hicks

    Gov voted for Paris accord ,net zero,to ban the sales of all new petrol ,diesel cars, vans & trucks in 2030 ,they sanctioned Russia & china ,giving the French tens of millions along with Ukraine losses in tax revenues from the 2030 ban will be in the billions ,millions out of work if that don't cause another market crash I don't know what will ,UK banks in the shitter now !

  16. PH

    You cant regulate human behaviour

  17. 2BIKB

    Be the final straw if it is.

  18. N30N

    You may not believe this! but I suggest to believe in the Lord Jesus Christ and you shall be saved.

  19. daveextra

    "Inflation" is an increase in the money supply, "Deflation" is a reduction in the money supply, the drying up of credit, If M2 is now zero, expect a recession/depression and war

  20. 144 000

    It's crashing because it was planned to.
    Anyone who backed lockdowns and furlough……….

  21. Stuart Wood

    One or two banks struggle due to falling bond prices due to central bank policies – this is not an issue that should spread to the wider markets – many retail banks will be making plenty more money due to rising rates

  22. abc

    I never trusted the banks , long years ago Ive stopped keeping my savings with these crooks.
    Invested in precious metals and crypto. I always could earn 1 % apr while banks lend my money to someone else.

  23. edward todd

    Go back to the Washington post

  24. edward todd

    Stupid democrat

  25. Bill Sellwood

    How much printed money ("quantitative easing") is our government going to throw to its mates in the banking industry ?

  26. Zoran Grgurevic

    What about 700 billion pounds given away during covid and its effect on inflation? The money that ended up in pockets of the richest hasn't been mentioned at all by this bunch! No realistic explanation has been presented here at all I'm afraid. Just smoke and mirrors.

  27. Peter

    OMG. Not Patrick Minford!

  28. Peter Hicks

    Recession ? we are in it mate ,worse to come ! /UK

  29. gordy pattison

    Wot ! No mention of Meghan ?

  30. J.T.

    Global interdependence is the problem along with unregistered asset inflation and printing, of course. There's the value we see on our screens right now of banks/businesses/economies and then there's the true value which we never see; the market will inevitably reveal true value.

  31. Know BS

    We have greedy incompetent idiots running the economy. STILL

  32. J.U.S.Trucking

    Many are making the mistake in thinking that the "Fed" is making mistakes, or poor decisions. That is NOT the case. This has been, and will continue to be, a coordinated decimation of the US Dollar in order to introduce a CBDC. At which point ALL of the "western" affiliated central banks will have grounds to 'reset' world debt, (well, their debt, not yours) and implement unprecedented control over all citizens. (PLEASE note that these first banks were ALL deeply involved with Crypto-currencies, which the FED absolutely fears and loathes) Look to God folks. These times are foretold, and the answers lie with Jesus.

  33. brian oleson

    bs video the m2 money supply for the 1st time in 90 years is -2 every time going back to the 1800s the other 4 times we had a depression it could be worse then 2008 and nearly 100 % as bad

  34. musicfan

    The monster in the laboratory is the federal reserve the prints it's own counterfeit fiat money which expands the supply and causes the inflation which we the public are paying dearly for. The idea that these banks are regulated is fascicle. The US banks that went bust last week were deliberately sabotaged because they were involved in the crypto community & they wanted them out of the picture as competitors so they can launch their own crypto CBDC. There is no longer a free market economy. People are leaving the stock market because the whole thing has become a distortion of reality. It's no longer a place for long term investment, it's just a giant casino propped up with monetary methadone.

  35. Ian Briggs

    Let's please remember the fed the BOJ the ECB have been in overdrive on printing money for a decade and then act surprised when inflation rears it 's head,oh I forget it's only transitory,!¡!!!!!! Clowns

  36. Kai

    Anyone who knows anything now's this is a crysis to bring in a digital currency ohh wait we the bank's will save you all if you do as we say wake up stop talking rubbish

  37. Raz Khan

    I study economy and finance this is very interesting interviews

  38. TheBunce21

    Can someone explain to me how a conflict in Ukraine (which actually started in 2014) could possibly make interest rates to rise?…

  39. Raz Khan

    Lot of building society banks are closing

  40. Robert Allen

    it never went away the idiots just gave banks tax payers money, and kicked the can down the road, of course a crash will happen, but this time whole nations and currencies are all in, we have had years of idiots de regulating banks, allowing then to print and borrow ever more money, the question is why are those who run our ecconomy so corupt, and how come they know sod all about money

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