BOE chief sees ‘worrying echoes’ of 2008 — warns slicing, dicing of loans trigger alarm bells. Protect your wealth now

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Leaders around the world are starting to sound alarm bells about a potential financial crisis in the making.

Bank of England governor Andrew Bailey recently said he believes there are “worrying echoes” of the subprime mortgage crisis that led to the global financial crash of 2008.

The recent collapse of two leveraged American firms, Tricolor and First Brands, has Bailey worried that these events are, much like the late 2000s subprime mortgage crisis turned out to be, not just idiosyncratic, but signs of an impending systemic failure.

“Are they telling us something more fundamental about the private finance, private asset, private credit, private equity sector, or are they telling us that in any of these worlds there will be idiosyncratic cases that go wrong?” he said at the House of Lords committee.

“If you go back to before the financial crisis when we were having this debate about subprime mortgages in the U.S., people were telling us: ‘No it’s too small to be systemic; it’s idiosyncratic.’ That was the wrong call” (1).

The mortgage crisis of 2007 led to a housing market bust that triggered a brutal recession, requiring costly bank bailouts in both the U.S. and Europe.

Bailey fears the current financial engineering used in private credit markets is similar to the high-risk bets banks were taking on home loans back then.

“We certainly are beginning to see, for instance, what used to be called slicing and dicing and tranching of loan structures going on, and if you were involved before the financial crisis and during it, alarm bells start going off at that point,” he said.

If the current gloomy outlook on the future of the market has you worried, there are ways to protect your wealth before a crash occurs.

How to prepare for a global financial crash

If you’re currently self-managing your investments, now might be a good time to consider enlisting a wealth management team. Those on the inside have their ears to the ground and can help you make strong decisions today before the crash occurs.

A wealth management team like Range can help ensure your portfolio is balanced and without any high-risk investments that might be first to fall should a crash occur. Their all-in-one wealth management platform offers modern investment advice without any hidden fees.

Since traditional advisors can charge anywhere from 0.5-2% AUM fees, Range’s flat-fee pricing with 0% assets under management (AUM) fees offers the same benefits at a fraction of the cost of what other guys charge, which could save you thousands each year.

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Recession fears have also led to a historic run for precious metals this year. Gold’s value increased by about 53% this year (2), while silver has seen a 70% price increase (3). These commodities are known for safety during market chaos, meaning it might be a good time to consider investing in them.

If you want to invest in gold while also receiving significant tax advantages, you might consider opening a gold IRA via Thor Metals.

Gold IRAs allow investors to hold physical gold and gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold. This makes it an attractive option for those looking to hedge their retirement funds against the ongoing tariff instability.

Learn how to get up to $20,000 in free metals on qualifying purchases in this information guide.

Diversification is always a solid strategy to help lower risk during market turbulence. If you’re not already invested in commercial real estate, it can provide another pathway to diversify your portfolio during tough times. First National Realty Partners (FNRP) can offer you simple access to this $22.5-trillion sector. FNRP provides accredited investors access to this diversification strategy through commercial grocery properties like Whole Foods, Kroger and Walmart. With a minimum investment of $50,000, you can own shares of properties leased by these commercial brands and other grocers serving your community. Answer a few quick questions about your investment preferences to start browsing their complete list of available properties. Another diversification strategy worth considering is fine art. The fine art market is known for appreciating even in the worst of times, since great art is timeless, rare and irreplaceable.

While the price point for investing in a Basquiat is not accessible for the everyday investor, Masterworks is changing that by allowing investors to buy fractional shares of works from artists like Picasso and Banksy.

Masterworks handles the process of finding, purchasing and storing the artwork for you.

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Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

The Guardian (1); CBS (2); Economic Times (3)

This article originally appeared on Moneywise.com under the title: BOE chief sees ‘worrying echoes’ of 2008 — warns slicing, dicing of loans trigger alarm bells. Protect your wealth now

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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