By Michael Pento – Re-Blogged From Silver Phoenix
The cause of the Great Recession circa 2008 was collapsing home prices that led to an insolvent banking system. However, the next economic crisis will result from the bursting of the worldwide bond bubble and its devastating effect on asset prices.
One of the dangers from spiking borrowing costs is the shutting out of distressed corporations from capital markets, which will inhibit their ability to roll over and service existing debt. This will lead to a massive increase in the number of insolvent corporations.