The (un)surprising cause of the next financial crisis.

You know that it is coming, you just don’t know how … The next financial crisis.

Most predictions agree on the timing (2019 / 2020) and that it will be one of the deepest crises in the world history (the economy has been growing consistently for 10 years now), but no one can predict how it will happen. Knowing that, of course, would be priceless. Traders and hedge fund managers who took the ‘right side of the trade’ and bet against the 2007 subprime crisis made hundreds of billions over night. Jon Paulson and many others got famous and (even much) richer.

Crises are certain; they are inevitable like death and taxes because the world economy is based on the concept of greed. Human greed is good — it is what drives the economy up … and then gets it going again after it falls over the cliff. It is a necessary substance; a serum and a poison in one.

It was in the U.S. that greed got reinvented as a good thing. That is, it was the new world that injected poor immigrants with the idea of American dream and made money into a universal merit of success. And ever since it has been the U.S. that gave the world market bubbles. Last time it was the subprime mortgages and derivatives that no one understood; this time it is the tech sector.