Prior to the housing
bubble implosion, prescient prognosticators were predicting an economic disaster
the world hadn’t seen since the Great Depression. Pollyannaish investors thought the sky was
the limit. Many thought there was no end
to rising property values. Boy, were they
wrong.
We are in the throes of
another pending disaster, one that will make 2008 look benign by comparison. Yesterday, the rumblings of a financial crisis
shook the world’s financial markets. The
Economic Collapse blog reported the following:
The first trading day of 2016 was full of chaos
and panic. It started in Asia where the Nikkei was down 582 points, Hong
Kong was down 587 points, and Chinese markets experienced an emergency
shutdown after the CSI 300 tumbled 7 percent. When European markets
opened, the nightmare continued. The DAX was down 459 points, and
European stocks overall had their worst start to a year ever. In the U.S., it looked like we
were on course for a truly historic day as well. The Dow Jones Industrial
Average was down 467 points at one stage, but some very mysterious late day
buying activity helped trim the loss to just 276 points at the close of the
market. The sudden market turmoil caught many by surprise, but it
shouldn’t have. The truth is that a whole host of leading indicators have
been telling us that
this is exactly what should be happening. The global financial crisis that began in 2015 is
now accelerating, and my regular readers already know precisely what is coming
next.
And in case anyone believes this was just a blip,
take into consideration what is happening in South Korea.
This is yet another sign that tells us that
the U.S. economy has already entered the next recession.
And what happens
to the markets during a recession?
They go down.
In addition to the
bad data that we got from the U.S. and China, there was another number
that was also extremely troubling.
South Korean
exports have traditionally been considered a key leading indicator for the
entire global economy, and on Monday we learned that they were down a
whopping 13.8 percent in December from a year earlier…
We can expect volatility
in the markets from here on out, until the bottom finally falls out.
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