By Kenny Simon

Several warnings about the possibility of a market crash in 2016 have certainly been part of the major news headlines nowadays. How would early signs look like or sound like, you may ask? Well for a start, since the sound is said to travel faster than the speed of light, we seemed to be hearing what looked like ‘sound investment advice’ instead of positive trade ideas on new growing opportunities or investments, but why?

What is the evidence?

Well, firstly let’s look at evidence of it through the adjectives, used in news articles. That may have pierced our eardrums repetitively like a broken record, leaving investors feeling either a little disheartened, surprised whilst confused or even disappointingly curious with lines like; “Global stock markets are off to a volatile start..” , “Another slump in Chinese markets…”; “U.S. markets lost more than 20 percent of their value in a single day..”; “xxx down more than xxx % in its worst start since xxxx…”; “ stocks sink amidst global sell-off, Oil plunges….” And much more of a similar tone as early as you blink an eye the next time.

One big theme that may have formed the backbone of what’s going on now is said to be a possible ‘Bond Bubble’ is about to burst. Bloomberg, CNN or CNBC as well as other financial media, focuses on such a topics as China’s slowdown, soaring stocks & plunging Oil prices, for the only reason that the asset class is more volatile, making them more marketable or sellable.

New bond bubble?

However, we need to know that the bonds are a foundation of the financial system and the bonds are forming the focus point for Central Banks. To put it simply, the world is drowned in too much debt. The bond bubble was close to $20 trillion in size before 2008 and now it’s staggering many more trillions and still growing. Central Banks have the free choice and power to either let the defaults hit and just wipe out the bad debt from the financial system or attempt to inflate the debts away.