A collapse of the global financial system is imminent and the chances are that it will happen within the next decade, according to a leading forecaster.
The risk of a financial crisis has risen to its highest point since the financial crisis and the central banks of the world are struggling to find a way out of the current crisis.
What will happen when a global financial crisis breaks out?
“It’s going to happen,” said Andrew Bolt, an associate professor at the University of Melbourne.
“We are now entering a period of extreme uncertainty and we have to be very careful about what we do about it.”
He told the ABC the world is “at risk” from a financial collapse.
The Australian Institute of Financial Management (AIFM) expects global economic growth to contract in 2017 to 2.6 per cent, compared to 2 per cent in 2016.
The global economy has contracted by 0.7 per cent since the start of 2017.
It also forecasts that the world will miss its pre-crisis growth target of 3.6 percent this year.
The slowdown in global economic activity is largely due to the global economic slowdown.
But experts say that is not the only cause of the slowdown.
“The problem is that the financial system has been so fragmented and fragmented that there are no easy solutions to this problem,” Professor Bolt said.
He said the financial markets are not working as well as they could.
“What we need to do is to rebuild the systems, the institutions and the systems themselves, so that they are working as they should.”
Professor Bolt predicts the financial sector will collapse over the next 15 to 20 years.
“There is no way we can survive on the current level of activity for that long,” he said.
The world’s biggest financial institutions have struggled to survive.
The collapse of many of them, such as JP Morgan, Citigroup and Goldman Sachs, has caused the financial world to collapse into chaos.
“This has created the environment that we now find ourselves in, with an environment of chaos and uncertainty,” Professor John Maynard Keynes, one of the fathers of economics, wrote in his The Great Depression.
But a financial system that could collapse is not imminent.
There are still some key players on the planet who have vast reserves of money.
In the UK, the Bank of England has about $US2.2 trillion of reserves.
This is less than half of the $US5 trillion held by the US Federal Reserve, and less than a third of the US Government’s total reserves.
Professor Bolt predicted the UK could be a financial “skeleton” for years to come.
“In fact it’s more likely that the US is going to be the next financial system to collapse because of the financial systems in the UK and China, and because of what we are seeing in the US and Europe, that will probably happen by next year,” he told the BBC.
The US is the world leader in financial markets and its central banks have been the main driver of global economic and financial systems over the past 30 years.
But the US has also seen an economic slowdown and the Federal Reserve is forecasting growth in the next few years of just 0.1 per cent.
Professor James G. Johnson, director of the Centre for Financial Stability at the Commonwealth Bank of Australia, said there were many other countries that could be on the verge of a major financial crisis.
“If we look at the growth of the Asian economies, it is not surprising that they would be the ones that will be most affected by this economic slowdown,” he explained.
Professor Johnson said that while the global economy had slowed in recent years, the world economy has continued to grow and there was an underlying recovery.
But there was a risk that the global system could collapse.
“I do think that there will be a period when the world financial system collapses, because it is a system that is quite fragile, and if the global economies are not able to recover to the levels that they have been able to maintain in the past, then we have a real problem,” he added.
Professor George Osborne, the chancellor of the exchequer, has warned that a financial meltdown would be disastrous.
“A financial crisis is a very serious problem,” Mr Osborne said.
“But the risk is that it could be triggered by the wrong policies, the wrong decisions, by bad decisions by the markets, and it is the economy that is really at risk.”