I don’t believe the elites will allow the market to crash, at least not meaningfully. Sure, there will be another 20-30% drop coming soon (almost certainly before the end of FY 2019), but not nearly as severe as the one in 2008.
1) The wealthy who control the government want to keep assets inflated for their own selfish purposes. Since wealth correlates with power in our society, they do not want the “fictitious capital” (as Marx put it) to simply disappear, since that will erode their political grip.
2) The middle class, or what few individuals remain of the “middle class,” rely on 401K’s and IRA’s for their “retirement.” This means that if stocks go belly up, they will be extremely angry and direct their anger in ways that might unsettle the established order.
In fact, we can trace almost every populist movement since 2009, whether it’s Occupy Wall St, the election of Trump, or the Yellow Vests (currently ongoing) to anger over wealth disparity caused by elites setting into motion policies that allow them to plunder and loot the rest of society with impunity.
3) Experimentation with QE has opened Pandora’s Box and instilled rather devious ideas (bail-ins, central banks buying stocks and not just bonds directly, etc.) that will allow the financial oligarchy to prop up markets indefinitely.
The good news is this: despite the near certainty that central banks will re-engage QE, at some point it will all fall apart anyway.
I think what we can do is look at Japan, which offers a good glimpse of the future:
Japanese interest rates (central bank):
As you can see, despite Japan being in ZIRP/NIRP since 1999, they’ve suffered 2 50-60% crashes along the way, just like the rest of the world. Perhaps the influence of interest rates is overstated and weighted too heavily by the bears?
The counterpoint (by idiot perma-bulls) is that Japan’s population is decreasing, while the US has fairly lax immigration laws (compared to the rest of the world, at least).
That’s true, but the RATE of population growth AND labor productivity growth are decreasing in the USA
I have been unable to find figures after 2016…if anyone has them, please do share.
I haven’t even gotten into the effects of automation + Boomers drawing down their accounts to finance their retirements, which will likely trigger a long-term bear market, like the one that gripped Japan from 1990 – 2003.
But needless to say, central bankers are far from being gods, and we should be thankful for that.