Editorial: Storm clouds gather on another economic meltdown

Financial analysts are a dime a dozen. (Sorry, financial analysts.) And it’s not uncommon to have a gaggle or two of the profession’s outliers predicting economic Armageddon that never seems to come. That’s outside of those urging us all to buy gold and silver to save our financial selves.

But when a large bank issues such a warning, we take note. You should, too.

Friday last, the Royal Bank of Scotland predicted a “cataclysmic year” for investors. The world’s 20th-largest banking company is predicting stock markets could fall by up to 20 percent and that oil prices could tank to $16 a barrel. Others see it crashing to $10.

A worldwide economic slowdown is upon us. But is it a meltdown?

“Sell everything except high-quality bonds,” the U.K. bank cautioned. “This is about return of capital, not return on capital.”

“In a crowded hall, exit doors are small,” it warned, likening the unstable climate to the Great Recession’s 2008 run-up.

Indeed, storm clouds are gathering — continued high underemployment, understated inflation, paltry savings, anemic manufacturing and government officials pooh-poohing flailing economic indicators.

We’re not calling for burying cash in coffee cans. But we are calling on everyone to keep their antennae up, their heads low and those purse strings tight.


The Pittsburgh Tribune-Review