Why Are DSK, Dalio, Gundlach And Roubini Predicting A New Major Financial Crisis?

Key points : - Dominique Strauss-Kahn, Ray Dalio, Jeffery Gundlach and Nouriel Roubini all share pessimistic views. Let’s examine together the basic economic reasons for their thinking. - Zero rates made the value of assets explode; thus, the yields of those assets also tend toward zero, since there is no added wealth creation that comes with them. - The central banks’ support of the economy and zero rates are blocking the necessary creative destruction described by Schumpeter. Thus, the consequence of this latent crisis – which seems painless – is a slow breaking down of the economic fabric. Dominique Strauss-Kahn recently argued in an interview that the world is less prepared today to face a financial crisis. Ray Dalio, one of the 100 richest men in the world and unmatched financial manager, tells us that the situation is similar to the one at the end of the ‘30s. And Jeffrey Gundlach, another billionaire fund manager, told us in Ju...

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