The Market Isn’t Done Falling
The Market Isn’t Done Falling By Nick Giambruno for Casey Research
As early as January 2017, I said to expect “a stock market collapse at least as severe as 1929 or 2008.” And, “I think there’s a very high chance of a stock market crash of historic proportions before the end of Trump’s first term.”
It wasn’t a lucky wild guess, but the conclusion I came to after putting together the different pieces to see the big picture, which is what we do at Crisis Investing.
As you may remember, the Federal Reserve responded to the 2008 financial crisis with unprecedented amounts of easy money. It claimed this would “stimulate the economy.”
Just think of the $3.7 trillion in money-printing programs, euphemistically called quantitative easing (QE) 1, 2, and 3. That money didn’t come from someone’s savings. The Fed simply created it out of thin air.
The Fed’s money-printing programs created enormous and unprecedented economic distortions and misallocations of capital. It ended up creating not just a housing bubble, or a tech bubble, but an “Everything Bubble”… the most massive financial bubble in human history.
I was confident that the Everything Bubble would find a pin before the 2020 presidential election. The coronavirus turned out to be the pin.
But the pin is almost irrelevant. What is relevant is that over a decade of extreme monetary distortions created the biggest bubble ever. It has just started to burst, and there’s nothing anybody can do to stop it.
Consequently, the ensuing bust is going to be much bigger than anything we’ve ever seen.
The reality is that the US is falling into the worst economic collapse since the Great Depression, or what Doug Casey has termed the “Greater Depression.”
And Doug has previously said, “It’s going to be even worse than I think it is.”
The Flipside of Crisis Is Opportunity
Longtime readers know that Doug is one of the world’s most successful crisis investors. He literally wrote the book on it. His book, Crisis Investing, was a New York Times Best Seller for 34 weeks. He’s also hit numerous “home runs” investing in crisis markets.
There’s lots of doom and gloom ahead, but you don’t need to panic.
The Chinese symbol for crisis is a combination of two symbols: the symbol for danger and the symbol for opportunity.
The danger is what everybody sees. The opportunities are never quite as obvious, but they’re always there.
I think a historic crisis is just getting started.
But it will also create a fortune-building opportunity of a lifetime for the well-prepared.
A crisis often allows you to buy a dollar’s worth of assets for a dime or less. Many of the world’s greatest investors have made their fortunes this way, but anyone can do it.
That’s what Crisis Investing is all about.
As Baron Rothschild correctly observed, the best time to buy is “when there’s blood in the streets.”
The Streets Aren’t Bloody Enough Yet
Since the stock market peaked on February 19, it’s been in a state of turmoil. Stock prices of companies in some industries collapsed by more than 50% as of writing.