17^th August 2016

3 Steps to take in preparation for the coming global economic crash

The next global economic crash and recession is not a question of “if” but “when”. At leaf.ae, we believe that the next crisis will be triggered by a major event within the next 12 months. No one can predict what kind of trigger it would be, but we know it would be another “Lehman Brothers” moment, or much much bigger.

Deutsche Bank, with its headquarters in Frankfurt, is the riskiest bank today, which according to a recent IMF report, can potentially send shocks to global financial system. The giant German bank has a current derivative exposure of more than $70 trillion, which is 5 times greater than the GDP of Eurozone! In addition to that, we saw a 98% slump in profit for the bank during the second quarter of this year… things are not looking pretty. Could Deutsche Bank trigger the next big crash?

The team at leaf.ae has compiled 3 steps that anyone can take to prepare for the next economic crisis, which we truly believe, will dwarf the 2007-2008 crisis:

1# Stay Informed.

It is easy to rely on the mainstream media as it is so readily available everywhere (TV, newspapers, magazines). But we need to be careful when it comes to economic news as it affects every one of us, directly or indirectly. For those that remember the days before Lehman’s collapse, none of the mainstream media signaled any alerts about what was coming. The media played a major role in calming investors around the world and broadcasting “good economic news” despite all the negative indicators, until we were unexpectedly shocked by the Lehman Brother’s sudden collapse. It sent shockwaves around the world as no one was expecting it (except a few economic analysts that tried to warn us). We can expect the same out of mainstream media this time. They will not warn us or raise any alerts until the actual trigger of the new crisis.

2# Reduce Debt Burden

We live in a global debt-based economy and it is difficult to go on our lives without the help of banks and financial institutions. But do we really need that much debt? Is it a necessity or a lifestyle? Debt has unfortunately become a tradition. Credit cards, property mortgages, car loans, personal loans and even travel loans are becoming the norm in our societies. If we really take a moment and think about how much we are losing in the long-term dealing with debt, it becomes clear that we over-pay due to high interest rates and other “hidden fees”, let alone the headaches and stress.

Do we have to purchase a luxury car through financing or can we be content with a less costly and more efficient car? Do we have to buy a property with an expensive mortgage plan or should we rent a decent home? Do we have to use our credit cards to buy online or book a hotel, or can we just use our debit cards (which also enable us to making our online books and other reservations)? These are questions that everyone must ask and think about. Individuals that have zero or lower debts will be better positioned to overcome the next crash while those overloaded with debts will be in a tough position.

3# Save, Save and Save..

We live in a consumer-based society here in the UAE and all over the developed world. We spend more than we save and over-time this will throw us in the negative territory if mismanaged. In the good old days, people used to save for their future home, future car and the education of their children. Look around you today and ask, how many people actually have a serious savings program? Savings not only help you plan for the future, but also protect you during emergencies and economic crises. At leaf.ae, we recommend keeping some cash (preferably at home too), physical Gold and physical Silver. Both Gold and Silver have proven to be the best safe havens during economic hard times. Gold was around $770/ounce before Lehman Brothers collapse and reached $1900/ounce at the height of the last crisis.

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Leaf.ae – Team