There have not been so many trouble signs for the global economy in a past few months. Analysts are sounding the alarm about junk bond defaults, the smart money is getting out of stocks at an astounding rate, mortgage rates are absolutely skyrocketing, and Europe is heading to a full blown economic meltdown.
Of course expectations that another global economic collapse will happen among the general population are probably low right now, but the reality of the matter is that we are probably closer to a new one erupting than at any point since the last economic collapse and stock market crash in 2008. Since the last financial crisis our long-term debt problems have just continued to grow, and there are many that believe that the next economic crisis will actually be far worse than what we experienced ten years ago.
Definition Of Economic Collapse
An economic collapse is essentially a severe version of an economic depression, where an economy is in complete distress for years, or possibly even decades. A total economic collapse is characterized by economic depression, civil unrest and highly increased poverty levels.
The Great Depression in the United States is a prime example of an economic collapse. The 1929 stock market crash brought on a collapse that lasted for many years and saw high levels of poverty. Well-known economist John Maynard Keynes claimed this was from the total lack of government involvement in the economy or the financial markets.
Definition Of Stock Market Crash
A stock market crash is a sudden dramatic decline of stock prices across a significant cross-section of a stock market, resulting in a significant loss of paper wealth. Crashes are driven by panic as much as by underlying economic factors. They often follow speculative stock market bubbles.