The seriousness of the present situation, and the potential for screw-ups by governments and financial authorities, are not in doubt. Ditto the scope for individual financial disasters.
But the overall resilience of the system may be greater than some fear. There is a huge amount of private-sector brainpower able to switch into restructuring mode with lightning rapidity – far quicker than any regulator or finance minister can react – as was demonstrated by the Far East crisis of the late 1990’s, for example. The profit motive has a way of sorting these things out: and the speed of modern communications ensures that price signals are transmitted widely and quickly. Almost any big shift represents an arbitrage opportunity for someone.
The disposition of wealth before and after a big shock is different, for sure. And, as airily as we may dismiss the Asian financial crisis a decade on, it needs to be recalled soberly that some Indonesian tribes reverted to cannibalism, so extreme was the resulting poverty for a while.
We may not need to wait long to find out whether I am right. In the meantime, on a personal level, as Sackerson has recently commented, diversification is the key.
My ventures are not in one bottom trusted,
Nor to one place; nor is my whole estate
Upon the fortune of this present year (Merchant of Venice)
(Or invest in guns ’n gold, of course, if the Hitch is your preferred sage ...)