Have we begun the next Stock Market crash? Interesting question. My view is that there is a difference between market uncertainty that can cause corrections and volatility and fundamental reasons that cause a bubble to burst - i.e., a stock market crash.

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Let's start with the former, the current market uncertainty and volatility. What's it being caused by? As we know when the US sneezes the rest of the old catches a cold. Therefore, and perhaps wrongly, depending on your perspective, US China Trade Wars have far wider implications on markets than Brexit. My view is that the Trade Wars are causing uncertainty and volatility in the markets. I do not think they will be the fundamental reason, or pin, that burst the bubble.

What will burst the bubble? My view, US Debt. Specifically, US Government and US Consumer Debt. Some quick stats: 1) Total US debt has risen over 1,500% since 1980; 2) Since 1980 personal debt per US citizen has risen over 700% and is over $58,000 per citizen on average, whilst the average savings of a US citizen earning between $45k - $70k is $2,200! 3) Since 1980 US GDP has risen 793% whilst US national debt has risen 2,351%.

Clearly the US expansion has been fuelled by debt.

What's the catch with debt? Oh yeah, one day you have to pay it back. The US decided to continually increase the debt ceiling, adding more fuel to the fire, rather than pay down their debt burden. The debt ceiling has been increased over 70 times since the 1940s.

OK great, but so what - won't they keep increasing the debt ceiling? Well, can someone live off a credit card forever paying low interest? I don't think so. What happens when the next recession hits, remember this is now the longest bull market in history. The 'Chinese' and other lenders to the US will want increased interest rates on their loans to offset the risk. This means the national and personal debt burden will start to increase (I've simplified this). Organisations who were overly leveraged now have to scale back operations to pay their debt, same with people, and as one persons spending is another's income the economy starts to slow.…

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