GLOBAL FINANCIAL CRASH: Warning over ‘HYPER-CRASH’ that makes other crises look ‘MINOR’

Tuesday, November 27, 2018
By Paul Martin

GLOBAL financial markets could be heading for a “gigantic collapse” from a so-called “hyper-crash” with far greater catastrophic consequences than previous economic crises, new research has warned.

By LEVI WINCHESTER
Express.co.uk
Tue, Nov 27, 2018

Previous crashes will appear as “minor stumbling blocks” in comparison to what nuclear scientists are predicting as a massive worldwide financial meltdown “such as never before” in the mid-2020s. Analysts from the Institute of Nuclear Physics of the Polish Academy of Sciences in Kraków are forecasting the future of the global economy as “extremely bleak” as “nervousness of the world market is growing all the time”. The academics’ “catastrophic” predictions come from “multi-fractal” analysis of financial markets published in the journal Complexity. The researchers looked at various economic measures, including Standard & Poor’s 500 index – the largest global stock market index including the largest 500 firms, largely of a worldwide nature – from January 1950 to December 2016.

They said their main goal was not to make catastrophic forecasts, but to credibly present issues related to the occurrence of “multi-fractal effects”.

Professor Stanislaw Drozdz, of Kraków University of Technology, said: “The data is, unfortunately, quite unambiguous.

“It seems that from the mid-2020s, a global financial crash of a previously unprecedented scale is highly probable.

“This time the change will be qualitative, indeed radical.”

One of the standout findings from their research was a graph showing changes in the ‘Hurst exponent’ calculated for the S&P 500.

The ‘Hurst exponent’ is used to track long-term movements and generally reflects the degree of susceptibility of a system to a change in trend.

If a market is stable, their ‘Hurst exponent’ is usually equal to 0.5 or shows only slight deviations, with anything less showing less stability.

The Hurst graph for the S&P 500 starts at 0.5.

The exponent slightly decreased off the back of the infamous Black Monday financial crash on October 19, 1987 before remaining stable again for more than a decade.

At the turn of the century there was a clear fall, and by March 2000, the dot-com bubble had burst.

Just as before, the ‘Hurst exponent’ again stabilised, but for a shorter period.

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