Experts are warning that a stock market crash is brewing and it will devastate the prospects of an economic rebound and boost a massive banking crisis with bankruptcies.
In this video, we examine the signals pointing to an unprecedented collapse on the markets and use experts’ insight to explain to you how this may be the biggest monetary disaster in American history.
Market watchers are alerting that with so many different deteriorating elements piling up, at this point, a crash is unavoidable. Even the Fed’s extraordinary monetary policies and the Congressional stimulus plans that inject trillions of dollars to keep the bubble inflated won’t be enough to hold off the financial crash for much longer.
Despite the remarkable rebound in stocks we have recently witnessed, this upswing hasn’t been supported by the reality of the beaten U.S. economy, and stocks are being priced for a fully materialized economy recovery, and if there’s something we surely know, is that the economy isn’t improving at all.
Although we have seen unemployment rates fall, the numbers are still worrying and approximately 20% of the jobs that were lost are gone for good. Furthermore, forecasts project the U.S. economy will likely spiral down again during the last three months of 2020 and by 2021 the GDP could decline by 1.7%.
Right now, the biggest concern is that a second wave of viral infections will emerge as we approach the cold season, triggering more business closings and significantly reducing business activity. And, in case of a substantial surge in cases, that itself could lead the stock market into a crash. But unfortunately, the outbreak-related disruptions are just one of the numerous signs that a stock market crash is looming.
Amongst the most worrying signals that the market is about to break is the growing corporate debt bubble. The U.S. corporate debt has jumped to $11 trillion in 2020, as many companies struggled to replace earnings lost to the outbreak-induced lockdown. In this sense, a second wave of infection cases could spark a larger surge in defaults, and of course, markets won’t like that.
Also, the national debt bubble will certainly add more pressure to a financial meltdown. The fiscal stimulus spending alone has added $4 trillion to the national debt up until now, which has driven the debt-to-GDP ratio past 100%. From now on, GOP resistance will cut back on stimulus spending, meaning that stock market triumph has its days numbered.
Additionally, according to stock market rules created by Wall Street veteran Bob Farrell, a bear market starts with a large downfall, which is then followed by a “reflexive rebound.” We have witnessed both of those stages this year. If the market continues to follow the rule, the third stage will cause a dramatic decline.
The possibility of a contested election, for its part, will spread fear amongst investors, who think a Trump-Biden legal fight will linger for a long time and act as a driving force to create a more acute, longer-term stock market collapse. Strategist at Contrarian Macro Advisors, David Hunter disclosed that he believes we are on the brink of “the biggest monetary disaster in historical past”.
The strategist separates his apocalyptic prediction into two distinct phases, In a nutshell, Hunter expects a large “soften up” rally to take place within the subsequent few months, and ultimately it will “set the stage for an 80% inventory crash”. In his perspective, the only repercussion that stemmed from the economic crisis resulted from the viral outbreak was a “fake-out sell-off”.
And the results of it were only a blip on the radar of a lot bigger, debt-and-leverage-fueled development that has been constructing for years. That’s why he defends that the huge amount of debt and leverage on which the monetary system is based upon will start stumbling. By adding some extra trillions of presidency and Federal Reserve stimulus into the equation, then we’ll dive even deeper in debt.
At this stage, liquidity injections will only be one more aggravating factor, because our monetary system will be so overly-stressed by the excessive amount of debt, businesses bankruptcies, and unbacked leveraged that the next stock market crash will likely break historical standards, leaving us in a deep economic rock bottom one more time.