Bill Gates Warns Another Financial Crisis is coming like the 2008 Great Recession

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Bill Gates Predicts the Fall of Economy

Bill Gates, in a recent 'Ask me anything' reddit session (or AMA , for short) opened up about his
thoughts about the recession of 2008 and his predictions for the future of the American economy.

First of all, if you don't know what reddit is, it's a community-based content aggregator, where
registered users submit questions, posts, links that are then voted up or down by other users. The votes
determine the popularity of the post. Kind of like the 'trending' posts section at various news and media
outlets.

In the Q&A, Mr.Gates, the billionaire co-founder of Microsoft, was asked that if he thought the US could
face another financial crisis like that of 2008. To which, he replied with a very acute prediction.

He said," Yes, it is hard to say when but this is a certainty".

The recession of 2008, after the great depression of the 1930s, was one of the hardest financial crisis to
hit America, to date and like the Great Depression, it too began in the US and slithered past its way to
the whole world. It was caused when the US banks created a great sum of money in a short amount of
time, by giving out loans (every time loans are given, money is created while repayment of loans destroys
money) and then used that money to drive up the cost of property and to speculate on the financial
market. This hike in price caused many of the people who had taken loans, to fall behind on payments or
just downright rendered them unable to pay back their loans. This put the banks in danger of going
bankrupt which led to the financial crisis.

Just after the crises, the banks restricted the lending of money, and stopped giving out loans,
leading to the fall in the price of property and housing. Thus, the bubble finally burst and people had to
sell off their assets in order to pay for the loans and the huge amounts of interest on them. This shrunk
the economy (as repaying loans destroys money). With little to no new money being created and the
people paying off older loans, the world's economy fell into a period of recession, the effects of which,
can still be seen, even after a decade.

In a nutshell, banks created more money than the people could pay off which led to an economic crisis.

Despite the cautious remarks, both Gates and longtime friend, Warren Buffett remain positively
optimistic about the US economy's future.
He added," Fortunately, we got that one reasonably well. Warrren has talked about this and he
understands this area far better than I do".

In an essay for Time magazine, Buffett stated that the years of growth certainly lie ahead and that most
American children would live far better than their parents did.

Even with this prediction of an inevitable crisis, Gates believes in the ability to bounce back from any
such crisis.

At the end of the 'Ask Me Anything' session, he said," Despite this prediction of bumps ahead, I am quite
optimistic about how innovation and capitalism will improve the situation for humans everywhere".

During the market fluctuations in 2016, Buffet told CNBC that the best strategy for the stock investors
was to buy and hold. That, they shouldn't watch the stock market too closely. If such people kept
worrying about their retirement plans, every time the market fluctuated by a little bit and thought that
they should sell stocks, whenever it rose slightly, then that isn't going to get them good results.

He advised , not to mess with stock through fluctuations, "If you aren't willing to own a stock for ten
years, don't even think about owning it for ten minutes".

Perhaps the crisis Gates was referring to might be related to crypto trading. 2017 saw an increase in
crypto miners by, perhaps, a hundred folds thus causing a worldwide shortage of graphic cards and huge
inflation in RAM prices, in the PC market -which by the way still hasn't recovered . Consequently, one of
the recent financial crisis to hit the world was in the realm of crypto trading. The staggering fall of
Bitcoin (BTC) from $20,000 USD to just above $ 6000 USD left miners and investors of all crypto-
currencies, with massive dents in their crypto-wallets, provided they even managed to remain afloat
during this crisis.

The crypto-currency market is extremely volatile. It is prone to drastic shifts based on just rumors
ranging anywhere from news of a company dumping its stocks in another company to some xyz country
banning crypto-trading altogether. In the months following the crypto-crisis, BTC recovered some of its
value and rose to about $10,000 USD, but still remains in flux .

Maybe a bigger financial crisis might be lurking in America's and by extension, the world's future and
maybe it will have nothing to do with crypto-currencies . It might be triggered by politics or it might not
be. The only thing we can hope for is that Gates optimism about the future, stands true for the
foreseeable future.