“The effects will be more dramatic than any previous crisis”

FS Focus congress on the current financial crisis


“The bad news is: you have no idea how far this crisis reaches. The good news is: you belong to the small group of people that is well informed and well educated. Look for a job in companies that are less affected by the crisis, like governments or national banks.” Last Monday, financial study association FS Focus organised a congress on the financial crisis. In an almost full Aula at the Minderbroedersberg, students heard a professional’s point of view.

Dutch investments editor and journalist Willem Middelkoop has no promising story to tell on Monday afternoon in the Aula; the effects of the current economic crisis will be more dramatic than any previous crisis. The stock market, for instance, has crashed deeper than in the thirties. More people have already lost their jobs and it’s still unclear when these job losses will come to an end. The housing market is collapsing, and prices are going down. “People have bought too-expensive houses and taken out heavy mortgages. Now, with house prices dropping, the economy really has a problem.”

Middelkoop illustrates this with a picture of Dubai. It shows luxurious skyscrapers and dozens of expensive apartments. “This is proof of the madness in the world. For ten months a year, it’s too hot to even sit outside in Dubai. Nevertheless, enormous construction work has been going on for years to attract the rich and famous to buy houses here. Now, many projects are being put on hold. No more houses are being sold, and the real estate bubble has burst. This is an extreme example, but you see this burst happening all over the world. Also in Europe, and especially in Ireland and the Netherlands where housing prices have increased the most since the eighties.” 

When it comes to shares, Middelkoop sees no good coming out of the stock market for the next ten to fifteen years. “When you look at history you see that the rallying of the stock exchange takes quite a while. Now, pension funds are saying ‘give us a few years and our shares will be restored’. They’re fooling us by saying that, and the government and unions are supporting them.”

Furthermore, worldwide production and export has decreased: “In the United States about 8.5% of people are unemployed. Already $1200 billion has been lost worldwide. And the International Monetary Fund foresees a loss of $4000 billion before this crisis is over.” So what’s the solution? “Actually there is no plan B – our monetary system is based on the dollar, but experts claim that the hegemony of the US has come to an end. China and Putin from Russia will claim a bigger piece of the pie. And world power will move from the US to Asia.”


Irene Smeets

“The effects will be more dramatic than any previous crisis”
Sanja Gjeverno

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