Are we on the brink of an unprecedented crisis?
Marc Vidal, lecturer and commentator, warns that 2023 could be the year of a crisis that would leave all previous crises as a “pure anecdote”, as predicted in 2019 in a book by Marc Friedrich and Mathias Weik. A confluence of different circumstances could create the perfect storm.
Is the mother of all crises looming? That is the question posed in the book ‘The biggest crash of all time’ by Marc Friedrich and Mathias Weik, which was a bestseller in Germany in 2019. The book predicts that a big economic crash will come this year, with an unmitigated collapse of the European stock markets. In short, “a crisis that will make any previous crisis a mere anecdote”, according to the lecturer and commentator Marc Vidal.
The book also features central banks that are “printing money as if there were no tomorrow”, bank deposits for which they charge you, and a catastrophic commercial situation. To these ingredients, we must add the increase in interest rates, which the authors of the book did not foresee and which is already being implemented by institutions such as the US Federal Reserve.
The burden of public debt
Marc Vidal warns that the interest paid by Spain each year amounts to 26.8 billion euros, which represents 2.15% of GDP and nearly 7% of the budget or, in other words, “half the cost of public education”. And he stresses that this is “only to pay interest, not to pay off debt”. In fact, the lecturer clarifies that “no state amortises a single euro of debt, what they do is refinance it every year”. And he points out that Spain has to refinance “237 billion” euros this year.
Vidal’s analysis of the Spanish situation is bleak: CPI above 8%, GDP barely growing by 0.3%, domestic demand falling by 3.7%, public debt at 118%, the forgotten risk premium at 100, unemployment at 13.65%, and energy once again at unacceptable levels. According to the writer, in order to rebalance the accounts, budget cuts would have to be “almost 10%”.
To deal with such a crisis, Marc Vidal explains that the authors of the book recommend investing in “real assets”, such as gold, and fleeing from the stock market and physical money, which will be devalued by the large amount of money issued by central banks. He adds that “it’s time to get moving, not standing still”.
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