AUDIO: Get ready for crisis 2.0

Nick Beecroft, senior markets consultant at Saxo Bank in London, warns that financial markets are at the brink of crisis 2.0.

In this free audio cast, Beecroft predicts the Federal Reserve will enact a third round of quantitative easing in September after Federal Reserve chair Ben Bernanke's commitment to do so if necessary at the Jackson Hole Summit on August 26.

Beecroft says this will result in a 5-10% bounce in equities and a weaker dollar as risk comes back on the table, as indicated by the relief rally following Bernanke's speech at Jackson Hole despite near all-time lows in consumer confidence figures.

"What seems to be happening is that bad news has become good news for stocks because it increases the likelihood of QE3," says Beecroft. "So we see a rally into year-end and, combined with increased printing of money, a weaker dollar environment."

However this will not sustain into the first quarter of 2012, when Beecroft predicts the European debt crisis will regain centre stage. By Q1 next year, he expects liquidity shortages to result in a stronger dollar environment as banks recognise the true losses on eurozone debt.

Click here to access the full audio cast.