Remember 2008

One of the privileges in studying the Austrian school of economics is knowing how the business cycle works. Unfortunately, the mainstream media does not go beyond mere description of booms and busts. They just accept it as facts and an inherent nature in a "capitalist" society.

The two most recent examples of busts were the collapse of the 2000 dotcom bubble and the 2008 housing bubble. Those who have been trading and investing in the PSE for decades have a lot of experience to share how they survived those financial storms. As a PSE newcomer, the only thing I can do is to review the past.

If you were a long-term investor in 2008, I don't know how did you deal with a 58.27% loss in your capital in just 4 months, from September to December? In fact, entering PSE in January 2015, my original plan was to invest long-term. But after experiencing the huge drop in months of June and August, I changed my mind. 

I admire those who confidently say that they are not worried about busts and see them as buying opportunity. However, at the back of my mind, I am thinking that perhaps these people have no first-hand experience of market crash.

I have been warning people I know that the current market situation is ripe for a massive correction. However, since I am no market expert and have no finance-related credentials, my warning was just simply brushed off particularly by those who happened to be fortunate enough to start investing after the 2008 market crash. They thought that the "cyclical bull" that followed would extend beyond 2016.

Even as a newcomer, I could not avoid worrying about the potential financial loss of my friends investing long-term in PSE. I came up with a list of alarming events in global finance since 2008. Some of them are accelerating and others are coming soon in the next few years.

Here is the list: ZIRP, NIRP, war on cash, decreasing international reserves, SDR, rising USD, rising bond yields, European banking crisis, political promise of huge infra spending funded by fiscal stimulus, and global taxation using climate change as a convenient platform.

Determine if this list contains facts or simply fear-mongering. If these are facts and you combine them into one, what message do they tell you?