Key Words: Mark Mobius warns that the trade war is a prelude to the next financial crisis
‘There’s no question we’ll see a financial crisis sooner or later because we must remember we’re coming off from a period of cheap money. There’s going to be a real squeeze for many of these companies that depended upon cheap money to keep on going.’
That’s the latest warning issued by veteran investor Mark Mobius, who told Bloomberg in an interview Wednesday that the worst may be yet to come in the wake of Trump’s latest round of tariffs on Chinese goods.
And what does he mean by “worst?”
Mobius is looking for another 10% drop in emerging-market stocks and, ultimately, a financial meltdown at home and abroad.
He says tensions between the U.S. and China will increase with Trump unlikely to suffer much backlash from his tariffs. The inflationary impact, Mobius explains, will be matched by rising wages at a time when unemployment is low.
The good news for bulls is that the 81-year-old investor, who left Franklin Templeton Investments earlier this year to start his own company, predicts the damage to markets will eventually prove to be a buying opportunity for savvy investors and he’s currently raising funds to take advantage when the time comes.
Watch the interview:
As markets stand now, stocks are getting hit hard, with the Dow DJIA, -0.71% down almost 200 points in midday trading.