In August I tweeted: "I was in #Lebanon last year. The currency peg is unsustainable and the aftermath of its collapse (by the end of the year I’d guess) will be brutal for the poor in the country." My prediction is, unfortunately, becoming reality. Lebanon’s dollar-denominated government debt is now cheaper than Argentina’s and is on the verge of imminent collapse. As always, the poor will suffer the most, while the rich are already sitting on foreign reserves, immune from a devaluation of the national currency. This story is as old as time, or at least modern finance. In an attempt to fend off inflation, governments turn to currency pegs which ultimately result in catastrophe.

The Lebanese government has assured bond holders that it will not default on payments and that the interest payments due on eurobonds at the end of the month and next year will be paid. Although I’d like to believe the Lebanese government, I am reminded of the words of a noted Turkish businessman, Faruk E., who often says: "If your best friend doesn’t have the money to repay their loan to you, they will default on that loan." In other words, Lebanon may be willing but unable to repay back its loan obligations. Capital controls already are in place with banks allowing a $1,000 per week withdrawal from foreign currency accounts. Protesters in the streets have ousted Prime Minister Saad Hariri and the political future of the country is in doubt.

The Federal Reserve’s (Fed) minutes from its last meeting will be released Wednesday (after this column has gone to press) and I believe the inflation that has eluded the open market committee will have continued to do so and the members of the committee will acknowledge as much in the minutes. So, what’s next? Further easing I believe. The Federal Open Market Committee (FOMC) will continue to ease and speed up its rate cuts to spur growth and inflation, lest unemployment picks up. It is an election year in the United States so the Fed will try its best not to appear to help Trump out, but can’t not do its duty.

Producer prices in Germany fell sharply as well last month and the European Central Bank (ECB) looks again to be in hot water. What to do? Not a lot of ammunition left in its arsenal, it appears, without spooking investors. Sustained negative interest rates, deflation, slowing growth. The perfect storm for Europe. China and the U.S. appear to be further now from a trade deal than they have been in months. The British are three weeks away from an election with no clear winner visible at present.

All of these question marks are flashing "risk-off" for investors. I predict a global slowdown in economies and a pullback in financial markets in the next six months, perhaps the worst since 2008. Where to invest during this downturn? Return of capital is the new return on capital, so anywhere with minimal risk would be the best bet.