The Dow Jones plunged 767 points as all market indexes lost nearly 3% or more on Monday. Growing problems in the global economic and monetary system teamed with fundamental weakness in the real economy of the US and China are considered a major factors.
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Central banks and the Federal Reserve are also cutting interest rates as China devalues the Yuan, and India just invaded Kashmir reclaiming land which was partitioned by the UK and US to be administered jointly with Pakistan.
We’ll see how it all develops, but it’s not looking good.
With manufacturing and trucking hitting new lows it would appear an economic recession is already here, if not on the immediate horizon. Monetary velocity has been slowing to historic slumps as well and central bank intervention appears to be failing. So what will it take to really bring markets down, a Black Swan event?
That’s exactly what we could have witnessed yesterday in the financial markets around the world. It does not look like the stock market has any room on the upside, and why should it? The last 10 years of upward price action has been mainly due to fiscal stimulus and money printing.
Wall Street has benefited once again at the expense of Main street, but it won’t last forever. With gold and silver ramping up after 7 years of flat price movement, there’s really no telling just how much the US dollar can withstand as the Fed promises more interest rate cuts.