During a recent Reddit AMA, Microsoft founder Bill Gates answered questions on a variety of topics. One or his answers, in particular, stood out when he was asked if we would see another Financial Crisis like the one that crippled the world economy in 2008.

"Yes. It is hard to say when but this is a certainty," Gates said. "Fortunately we got through that one reasonably well."

It is a sobering reminder that even though the economy today is as good as it has been in years, we are always right around the corner from the next bubble to burst.

What happened during the financial crisis in 2008?

The financial crisis in 2008 was brought on by the subprime housing market. Far too many mortgages were given out to far too many people who didn't qualify for them. The allure of low variable interest rates and little to no down payments made it easy to get into a home.

The problem was when those variable interest rates inevitably went up, people could no longer afford their monthly payments. Couple that with sinking home values and people were stuck with mortgages that were worth more than their home, so they couldn't sell. This led to unprecedented defaults.

The banks were motivated by greed as they packaged more and more of these junk loans into securities that could be invested in.

However, the unexpected rise of defaults crashed these securities and ultimately took down much of the banking industry.

Without a heavy taxpayer-funded government bailout for these banks, it is uncertain if the economy was ever going to recover.

Could this really happen again?

The short answer is: Absolutely. While the government came down somewhat hard on the banks that caused the 2008 crisis, many argue that the current rules continue to allow banks to operate with the amount of risk that could crash the economy.

Getting a mortgage has become much tougher, but there are other types of loans to consider. Obtaining a credit card or an auto loan is so simple that just about anyone can get one, regardless of their ability to pay.

Auto loans are necessary for almost all Americans who drive a car. Even if they can afford a decent car, many choose to finance more for a better car.

Also, factor in that relaxed lending rules for auto purchases and you can see the housing crisis repeating itself.

With a society that lives on credit and financing, we will always be at risk of the system collapsing. All it takes is for enough people to stop paying their bills, whether through choice or hardship, and it'll be 2008 all over again.

As more and more people default on the car loans, the risk to the banks who hold these loans will multiply.
© ALL RIGHTS RESERVED