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Experts Are Warning That A U.S. Stock Market Crash Is Very Likely In The Months Ahead

Michael Snyder
February 15th, 2021
The Economic Collapse Blog
Comments (5)

This article was originally published by Michael Snyder at The Economic Collapse Blog.

Stock prices are not going to stay this high.  Everyone can see that we are in a stock market bubble that does not have any parallel in all of U.S. history, and everyone can see that the end of that bubble is approaching.

The only debate is about how fast and how far the eventual fall will be.  For the first time ever, the ratio of U.S. stock prices to U.S. GDP has reached 200 percent.  In other words, the total value of U.S. stocks is now twice as high as the value of all U.S. economic output for an entire year.  To get an idea of how crazy this is, just check out this chart.  Historically, the ratio of U.S. stock prices to U.S. GDP is normally under 100 percent, and so if all stock prices were cut in half U.S. stocks would still be overvalued.  That is how extreme this bubble has become.

Other key valuation measures also indicate that stock prices have gotten wildly out of balance.  The following example comes from a Motley Fool article entitled “Here’s Why You Should Expect a 20% Stock Market Crash in 2021”

Looking back 150 years, the S&P 500 has averaged a Shiller P/E of 16.78. Admittedly, the Shiller P/E ratio has been a lot higher over the past 25 years. The advent of the internet has broken down information barriers for retail investors, and historically low lending rates for more than a decade have fueled borrowing and lit a fire under growth stocks.

But as of Feb. 3, the Shiller P/E for the S&P 500 was knocking on the door of 35 — more than double the long-term average. To put this figure into some context, there have only been five periods in history where the Shiller P/E ratio topped 30 and stayed there during a bull market run. Two of these events — the Great Depression and dot-com bubble — led to some of the biggest pullbacks ever witnessed in equities. Two other events (not counting the current move) occurred within the past three years, delivering declines of 20% and 34%, respectively, in the S&P 500.

Basically what this is saying is that if stock prices fell by half, the Shiller P/E for the S&P 500 would still be above the long-term average.

So if the market only falls by 20 percent this year as that Motley Fool article is suggesting, we should consider ourselves to be extremely fortunate.

We have never seen anything like this before.  The bubble that we are in now absolutely dwarfs the epic stock market bubbles of 1929 and 2000.  Stock market mania has gripped the entire nation, and all sorts of people have been getting rich, at least on paper.

But many Wall Street veterans that have been watching all of this transpire have become extremely concerned.  The following comes from a Forbes article entitled “Is The Stock Market About To Crash?”

‘Very, very concerning’ echoes of the 90s dot-com bubble are being heard loud and clear by nervous market experts. A 12-year-old bull market; SPAC mania; IPOs that more than double on the first trading day; an army of amateur traders and GameStop mania. It certainly feels like irrational exuberance–and it triggers alarms for those who remember the dot-com bubble of the late 1990s. “The parallels we have today are historically very, very concerning,” notes Jim Stack, president of Whitefish, Montana’s InvesTech Research and Stack Financial Management. “The current froth is the icing on the cake, and when you look through it, you see a lot of other underlying issues.”

In this sort of environment, videos by kids on YouTube showing people how to make a million dollars by day trading stocks get hundreds of thousands of views.

If you have been able to make a lot of money by playing the stock market, good for you.

Just make sure that you get out in time.

Every other stock market bubble in U.S. history has ended badly, and as John Hussman recently noted, this is our generation’s moment of peak financial insanity…

Nothing so animates a speculative herd as a parabolic price advance in an asset detached from any standard of value. I am convinced that future generations will use the present moment to define the concept of a reckless speculative extreme, in the same way our generation uses “1929” and “2000.”

So just how far does Hussman think the market could ultimately fall?

Well, he believes that stock prices would have to drop 65 to 70 percent just to get back to historical norms…

Understand how extreme current valuations have become. In order to simply touch run-of-the-mill historical valuation norms, the S&P 500 would have to lose somewhere in the range of 65-70% over the completion of this cycle.

Stock prices always, always, always get back to their historical averages eventually.

It is just a matter of time.

However, we should hope that a stock market crash can be put off for as long as possible because a truly catastrophic stock market crash would cause far more economic pain than we have experienced so far.

Our system simply would not be able to handle a decline of 50 percent or more in stock prices.  It would essentially mean the end of our financial system as we know it today, and that is something that nobody should want.

The good news is that I do not expect a stock market crash within the next 30 days unless some sort of major “trigger event” comes along.

Stocks may go down, but for the moment I expect at least a short-term period of relative stability.

But that short-term period of relative stability will not last very long at all, and I fully expect 2021 as a whole to be a very, very painful year.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  By purchasing the books you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse BlogEnd Of The American Dream, and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial, or health decisions.  I encourage you to follow me on social media on FacebookTwitter, and Parler, and anyway that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

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    Author: Michael Snyder
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    Date: February 15th, 2021
    Website: http://theeconomiccollapseblog.com

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    1. Andrea.Iravani. says:

      If anyone wonders what is wrong with America, the stock market answers that question. The government, stock market, and economy, financially reward irrational gambling which has been made exponentially worse with a culture of bail outs, and punishes financially responsible behavior both by leaving the financially responsible on the hook for the recklessly irresponsible, and because they are not receiving generous government bail out subsidies that the recklessly irresponsible are receiving.

      It is no limited to the stock market that corruption and reckless, evil, violent, destructive behavior are rewarded, but since most large companies are publicly traded, they have monopolized policy that is in the worst intersts of this country, and everyone in it.

      They financially reward evil, destructive, corrupt policy as a way of life. They also financially reward violating the constitution through the financial support of the techno-cratic surveillance
      state.

      Far too many people have placed their own financial interests not only above the interests of humanity and the country, but against their own lives and their own families lives by financing the surveillance state which would not exist to anywhere near the extent that it does without tremendous financial support.

      Far too many Americans have also placed their own financial intersts above their own best interests, families best intersts, and the countries best interests by continuing the propaganda, and refusing to report the truth because they were financially rewarded for pretending to espouse the legitimacy of the political system, the judicial system, the corporate sector, and just about everything else in this country.

      The fact that foreign sovereign wealth funds and foreign individuals have a financial vote in how are country is run and which rights we are illegally deprived of is treasonous.

      Foreign banks should not be Federal Reserve member banks and should not ever receive bail outs. I do not even think that our own countries banking institutions should receive federal bailouts other than FDIC insurance and insurance on deposits limited to the account holders and should be limited to U,S, citizens and legal residents of the United States.

      Of course ETFs have made all of this even worse.

      Andrea Iravani

    2. Andrea.Iravani. says:

      If anyone wonders what is wrong with America, the stock market answers that question. The government,  stock market, and economy, financially reward irrational gambling which has been made exponentially worse with a culture of bail outs, and punishes financially responsible behavior both by leaving the financially responsible on the hook for the recklessly irresponsible, and because they are not receiving generous government bail out subsidies that the recklessly irresponsible are receiving.

      It is not limited to the stock market that corruption and reckless, evil, violent, destructive behavior are rewarded, but since most large companies are publicly traded, they have monopolized policy that is in the worst interests of this country, and everyone in it. 

      They financially reward evil, destructive, corrupt policy as a way of life. They also financially reward violating the constitution through the financial support of the techno-cratic surveillance 
      state.

      Far too many people have placed their own financial interests not only above the interests of humanity and the country, but against their own lives and their own families lives by financing the surveillance state which would not exist to anywhere near the extent that it does without tremendous financial support.

      Far too many Americans have also placed their own financial interests above their own best interests, families best intersts, and the countries best interests by continuing the propaganda, and refusing to report the truth because they were financially rewarded for pretending to espouse the legitimacy of the political system, the judicial system, the corporate sector, and just about everything else in this country. 

      The fact that foreign sovereign wealth funds and foreign individuals have a financial vote in how our country is run and which rights we are illegally deprived of is treasonous.

      Foreign banks should not be Federal Reserve member banks and should not ever receive bail outs. I do not even think that our own countries banking institutions should receive federal bailouts other than FDIC insurance and insurance on deposits limited to the account holders and should be limited to U,S, citizens and  legal residents of the United States. 

      Of course ETFs have made all of this even worse.

      Andrea Iravani

      Someone is being financially rewarded to hack my comments, apparently. Why would anyone do something that idiotic? This is a country full of bird brained losers!

    3. Nope says:

      Do the so called “experts” ever predict anything positive? Ever?

    4. Andrea.Iravani. says:

      The elitists are believers of Hegal, but there is a lacking for the common sense of Sorren Keirkegaard, Revolt of the Single One, departing from the madness of crowds, social control, democratically socially decided norms that deviate from logic and God. Truth is eternal and is a gift from God for faith and choosing to reject evil and deception. On Techdirt, they are virulently anti-religious, and I was attacked. They fear the faithful because they cannot control them. They want people to feel that they must place their trust and faith in them, and if people place their trust and faith in God, they view it as a personal threat to themselves. Those that believe in determinism are of the same nature, based on my interactions with such individuals. They get squeamishly uncomfortable if it is suggested that individuals have a moral obligation to intervene when the ruling class has committed crimes against humanity, which would inconvenience them and disrupt their social networks. The eltists have sold out not only to societies detriment, but to their own and their families as well, who will be left to live in the horror that they have created for reasons unknown to me. How can anyone ever enjoy anyone or anything with knowing that they have chosen by deliberation to unleash unprecedented horror on the world and have committed to secrecy over it? It would be a meaningless and empty existence. These elitists have confounded me. Why would anyone want to be famous for being a pathological liar that has engaged in barbaric crimes against humanity that pretends to be a wealthy but mentally incompetent ass at best? If that is the “reward”, the elitists can shove it up their asses!  Where do I not sign up for that? It may help them, but it sure as hell won’t help me! How can they enjoy life? 

      https://plato.stanford.edu/entries/kierkegaard/

      Christians, myself included frquently ask WWJD? What would Jesus do? Of course nobody can answer that question with 100% certainty. I have deliberated over this question regarding my own circumstances, and the barbaric crimes against humanity perpetrated against me as well as my family, including illegal unconsented, uninformed brain surgery performed on me while unconscious in the hospital in 2014 at an extremely vulnerable time in my life, followed by constant theft, and vandalism, breakins into my home, round the clock surveillance, parroting by the media, stalking, gas lighting, and gang stalking. My Grandmother died a few months later, then in December of 2015, my Mother died and I believe that she was extrajucicially murdered by the medical mafia and the government like my Father was in 1998, then the police targeted my brother and illegally entered his home while he was asleep and abducted him and falsely imprisoned him without charges, after they had been stalking and terrorizing him previously. My brother died August of this past year. My dog also died two years ago. Vault 7 technology has destroyed thousands of dollars worth of things of mine, including phones, tablets, computers, expensive appliances, electrical circuit breakers. and a car. They started using Psychotronic weapons and mind reading technology on me after my first phone was hacked in June of 2017. So it is my personal belief that what happened during the life of Christ and what followed the crucifixtion of Christ was a chance given by God that humanity epically failed. I do not know what Christ would have done or said if Mary, Joseph, and one of his brothers were crucified prior to him. That is the context that I have chosen to view my situation, not that I am Christ or Godly in anyway, nor do I believe that my parents and brother were Gods. When people say, Jesus died for our sins, that in my opinion does not absolve sinners. Like, hey. Jesus died! We can sin as much as we want to now! It means that Jesus died because of our sins, the sin of crucifying him. They decided to crucify Jesus not because he claimed that he was a holy God. Jesus claimed that he was the son of man. They crucified Jesus because he wanted people not to be taxed and considered the tax collectors the worst sinners. I am morally opposed to forgiving people for what they have done to my family and myself. If I forgive them for this, who will be their next victims? What will I have to forgive them for next? They are serial criminal psychopaths who have been committing a crime spree on my family’s life and mine. They can ask God to forgive them, but they cannot expect me to, because they are monsters. They have even deprived me of my right to mourn the loss of my Grandmother, Mother, brother and dog. They revived me from a state of clinical death to torture, terrorize me, and prevent me from living my life. I was unaware that it was possible for people to be that evil. All of these things have also coincided with complete national and international insanity and national and international crimes against humanity with the scamdemic and vaccines.

      Andrea Iravani

    5. Anonymous says:

      Oh here we go. Back to “Stock Market” crash stories

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