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Is the biggest market crash ever seen coming by year end or next?
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Will this result in anarchy?
In real terms, yes, a crash is coming. In nominal terms, who knows. Jim Rogers has no shorts in the US stock market because - while he believes the real value of US stocks will be declining in the future - it is impossible to know how much price pressure the coming wave of inflation will have on the market. The Dow could go to 20,000 while the dollar goes to 0.50 Euro which would be a net loss for anyone invested in the broad market.
Whether the crash will be the “biggest ever” is hard to say, not least because you can’t really compare the past with the present. But the crash is going to induce real hardship. The degree of hardship and the duration of the crash is largely dependent on how irresponsible the political elites choose to be. It could be anywhere from moderately bad to apocalyptic.
Has it ever resulted in anarchy? Of course it won’t result in anarchy. The worse the crash, the more chaotic the social order will become and the more opportunity for naked authoritarianism there will be.
Clayton -
“Total US debt per today’s Daily Treasury Statement was $12,989,095 million. Also today, the US Treasury auctioned off $42 billion in 2 Year debt. This means that as of this moment, assuming the new debt were to settle today, the US has $13,031,095 billion in debt: congratulation America - you have now passed lucky $13 trillion in total debt. But don’t worry, we won’t stay here for long. At the current rate of issuance, $14 trillion will be passed in 8 months, and $15 trillion in another 7. By the end of 2011, we estimate total US sovereign debt to be about $15.5 trillion. For some recent vivid examples of prosperity courtesy of runaway debt issuance, please see Argentina, Japan and Greece.” - ZeroHedge
In truth, nobody can/does know for certain, and it is just as impossible to say one way or another for an “Austrian” , as it is for anyone else.
regards, onebornfree.
I can 100% say for certain it won’t result in anarchy. The people are too misinformed for a big crash in the near term to result in anarchy. They will still look to government for answers. It is our duty to get the message of freedom out to everyone. Show them that government is not the answer.
- I say yes. If US AND western Europe go bust at the same time, than yes, it will be apocalyptic. Japan is also near default so timing could make this into a great watershed moment.
- The closes we’ve ever been to a crisis like the one brewing up is when imperial monarchies where replaced by the democratic republics in WW1. So its unfair to compare the coming crisis to the mini-crises that we’ve seen during the XX century 9Great depression, WW2, ’87 crash, etc). Now, there’s no room to elaborate here, but I have reason to believe that if enough people live in democratic states that go bankrupt there will be a significant shift towards more freedom. Sure, there will be a time of civil war, riots, fractioning and so on. But if enough countries go bust at the same time, than I say that at the very least we shall have a return of the ‘political anarchy’ with hundreds of new ministates taking over. Form then on, who knows.
But the crash is going to induce real hardship.
My family is already suffering from the last meltdown. What do I suggest my dad to do so we don’t go bankrupt? Any good, basic, investment advice for surviving busts, here at Mises or any other website?
“im Rogers has no shorts in the US stock market because - while he believes the real value of US stocks will be declining in the future - it is impossible to know how much price pressure the coming wave of inflation will have on the market.”
Jim Rogers started shorting in April (so did I :). He shorted emerging markets, the Nasdaq, and an international financial institution. I’m not sure if he covered yet; I’m still waiting.
- Will we see the end of fiat money?
- If no credible alternative fiat currency remains (teh CHF at the very least will) than yes, fiat will be done with (for some time).
Only poor people use fiat currency. Everyone who can afford to keeps their value in stocks and commodities.
- Only to be replaced by a new one probably. This time a universal currency for much of the Atlantic.
But does stock and/or commodities have any stable value? Would it be possible to calculate economically in stocks? Also, in case of a massive hyperinflation I fear hat the stock market would disappear overnight. As for commodities they are far form being acceptable as money yet. So I’m afraid, storing value is one thing, but actually being money is entirely something else.
Gold’s not to bad.
You can do it with gold, so I don’t see why you couldn’t do it with walmart shares if they were a near universal medium of exchange.
Yeah a lot of businesses could go broke, but you can be sure that the ruling elites won’t.
I’d accept 100 dollars in gold over a check. But maybe its because i see the need to hide gold under my mattress 
“1. Is the biggest market crash ever seen coming by year end or next?”
I say it will happen within five years. But it will be the biggest ever.
“2. Will this result in anarchy?”
No.
I don’t know if a crash will come or not. I know the little money I have I put in Apple or AAPL. And I sold it a few days before it dipped 25% or so in one day a couple weeks ago. I’ve never seen such volatility and have been following the markets pretty consistently for about 6 years now.
Luckily I only lost $10 total. Gold will probably rise slowly some more this year. Oil too or a bit faster. Stocks will probably rise some more short term, but I just can’t see how they can keep interest rates low forever. Something’s got to give.
I’m just glad I don’t have much savings. But it might be a good time to short stocks again later this year or next once they’ve risen near their resistance areas.
Does anyone else find it interesting that when the world was beginning to question the supremecy of the US dollar, some things started to happen to cause “flight to quality”, which is apparently defined as buying US dollars…?
Um… prepare for events resembling the Biblical Tribulation? I’m of the camp that says almost everybody, even Austrians, are vastly underestimating the hardships that we are in for.
I’d say lots of emergency food and water rations, guns, a group of people who all trust one another to weather the storm together. Pray to whatever gods motivate you. The world is in for a population-reducing event that will make World War II look like the Boston Massacre. Oh, that reminds me, don’t forget booze.
Just my opinion.
Mr Clayton gave an excellent answer.
This is possible. If the DJIA doesn’t start making new all-time highs by next year, there would still be a few more support areas to break before the 6500-7000 low from March '09. But if it breaks all those and the low from last year and hits something like 5500, then it’s disaster time. Unemployment needs to get better soon. They’ll probably take us to war before all this happens. That would artificially lower unemployment. If I had a large amount of money right now I’d have no more than 10% in stocks.
Oil and gold are okay to hold - maybe about up to about 10% each, but I wouldn’t add to anything right now. I’d be mainly in cash if I didn’t have any other positions. Right now cash is the most secure thing if you hold no positions. Gold and oil will probably go higher the next 6 months, but there’s too much downside risk to enter this late in the rally. Maybe if they dip to recent lows/support levels you could enter with less risk.
But there will probably be a recovery in stocks fueled by oil company profits and tech stocks like apple. So I doubt doomsday will occur anytime soon like the next 5 years or so.