Will there be a market crisis unfolding in the USA?

[therighty]

Renowned international stock investor, George Soros, who broke the bank of England in 1992 by shorting the pounds and pocketed over a billion dollars, sounds the alarm of a financial crisis?

Despite China stock market woes and global economy weaken, U.S. economy stays strong.

Why is that the case ?

The effects of real exchange rate overshooting might be the cause.
With the spillover effects from commodity markets of declining oil prices into international asset markets, the U.S. real exchange rate, as an endogenous variable that is system driven, was altered. To conquer this real shock, the central bank exercised their money supply. With effects of short run expectations and exchange-rate overshooting, U.S. economy responded to the impact with greater magnitude than anticipated. To understand how this works, one would require to employ the Uncovered Interest Rate Parity Model, which is too technical for discussion beyond this point.

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[dothebeats]

Not to mention the over-leveraged assets and the derivative markets that adds weight to all of these factors. You can also add the Man-Baby president playing a dangerous trading game on loads of countries resulting into severed ties and broken trust from other countries. Give it <5 years and we'll see yet another financial crisis starting from the USA and deliberately affecting the world as well on its wake. We just don't know the severity of such a crisis but we know that it's near.

[The Sceptical Chymist]

To understand how this works, one would require to employ the Uncovered Interest Rate Parity Model, which is too technical for discussion beyond this point.

You sound like you know what you're talking about, and this also sounds like a discussion that's above my level of understanding of global economics.  Why not break it down for dummies like me?  I wouldn't mind hearing a bit more about Soros and the world economy. 

There do seem to be some dark clouds forming--I can sense it but don't really know what's going on with the global economy.  Metals have dropped, bitcoin has dropped, and the US stock market is dipping a little.  I was expecting the latter, since we've been in bull market for years now, but I'm curious about what to look forward to as far as prices go (bitcoin, silver, stocks in particular).

[davis196]

Renowned international stock investor, George Soros, who broke the bank of England in 1992 by shorting the pounds and pocketed over a billion dollars, sounds the alarm of a financial crisis?

Despite China stock market woes and global economy weaken, U.S. economy stays strong.

Why is that the case ?

The effects of real exchange rate overshooting might be the cause.
With the spillover effects from commodity markets of declining oil prices into international asset markets, the U.S. real exchange rate, as an endogenous variable that is system driven, was altered. To conquer this real shock, the central bank exercised their money supply. With effects of short run expectations and exchange-rate overshooting, U.S. economy responded to the impact with greater magnitude than anticipated. To understand how this works, one would require to employ the Uncovered Interest Rate Parity Model, which is too technical for discussion beyond this point.

There is another crisis coming and it's caused by the central banks and their fiat money printing machines,negative interest rates and their totally wrong money supply policy.We can see it coming,without the expertise of George Soros.A man,who makes money from the financial chaos.
OP,it would be great,if you try to explain the Uncovered Interest Rate Parity Model.

[FosterSofia]

And economic crisis happens when people go crazy for purchasing a stock or a scrip or a commodity, or even an asset. Just buying that will not cause an immediate down trend of global economics. When people are fascinated by extremely low interest rates, most importantly that of the US FEDERAL RESERVE, which is now near zero; people end up buying too much on leverage. They take too much loans just on the blind faith that the returns they get will be sufficient to repay back the interest. This blind faith is based on the blinder faith that the asset they own will forever Increase in value. So, there forms a bubble. It grows and grows, feeding itself on the never ending faith of the people on the asset. When many people buy the same asset, it's return on investment falls, but still manageable to pay back the interest.

[cc80aa]

    I think there is a market crisis unfolding in the U.S.A because of the trade war between U.S and china so the affected parties are the countries like in the third world countries are suffer their acts.
    will trump has a point to collect taxes to all goods coming from china thats why U.S. economy is boom right now, dollar has a superior but the returns is all goods must be high price,third world countries are affected called INFLATION RATE.

[chenhaonan]

At present, the US market is still under control, and there will be no market crisis for the time being. But in the next five years, the United States will certainly have serious economic problems. This must be the truth. Trump has been crazy to save the US economy, it is not stupid. But this only delays the timing of the market crisis, when the market crisis comes, it will be more serious than imagined. Now the status of the dollar has begun to waver, and the uneven cooperation is meaningless.

[Kville]

Interesting read.

[el kaka22]

It always happens in finance world, there isn't much that should be surprising anyone at all. The problem here is that American public elect a republican president who always has an economical crisis going on because of some weird laws or something which I don't understand since I am not American however Bush had this 2008 troubles as well and banks and all those lobby people know that if a bad thing happens the republicans in power will do their best to save their friends in the banks and so forth, unfortunately the world suffers from it but we are used to it by now.

There has been always a crisis going on in all around the world and I think there is no reason why the finance world will not collapse one day, there is no unlimited money supply whereas everyone keeps on acting as if they can make more and more money, if they make more money some other person is making less.

[SCheek]

Renowned international stock investor, George Soros, who broke the bank of England in 1992 by shorting the pounds and pocketed over a billion dollars, sounds the alarm of a financial crisis?

Despite China stock market woes and global economy weaken, U.S. economy stays strong.

Why is that the case ?

The effects of real exchange rate overshooting might be the cause.
With the spillover effects from commodity markets of declining oil prices into international asset markets, the U.S. real exchange rate, as an endogenous variable that is system driven, was altered. To conquer this real shock, the central bank exercised their money supply. With effects of short run expectations and exchange-rate overshooting, U.S. economy responded to the impact with greater magnitude than anticipated. To understand how this works, one would require to employ the Uncovered Interest Rate Parity Model, which is too technical for discussion beyond this point.

I'd say it has far more to do with Tax cuts.  Consumers spent their tax cuts and aide consumption or invest or save and their money is lent out.

[Theb]

With the spillover effects from commodity markets of declining oil prices into international asset markets

This one is already in the talks as of right now. Known suppliers such as Russia, USA, and Saudi Arabia have been know to unanimously stop production once they see that the oil prices are dropping, they have done it in the past and they are doing it again. It is there saying "we won't be producing the oil that is not demanded by the people" but we all know it is really not about the demand and it is about their profits soaring upwards again. The sad thing about this is the only thing good for us consumers right now is seeing oil pretty cheap right now, but once they stop providing new supply we can expect that gas prices will go up again.

[xiaoY]

Since the emergence of Trump has greatly delayed the arrival of the US financial crisis, although almost all of the world's commodities and crude oil have depreciated sharply, this is only a reasonable release of the bubble, so the probability of a Fed financial crisis is small. This may be after 5 years.

[1Referee]

We can see it coming,without the expertise of George Soros.A man,who makes money from the financial chaos.

That actually interests me. People have been acting like they know something is brewing, especially in the last couple of years, but aside from the talk, there isn't much that people do to actually counter any potential risk coming from a crisis. It's like people are waiting for a confirmation first so they can act from that point, but that's not the smartest thing to do.

You should start right now with lowering your exposure to a system people largely argree about that it will collapse at some point. Why do you think I have been stocking up on Bitcoin throughout the years? Bitcoin is the easiest way for me to actively counter the risks the regular system exposes me to, from within Europe itself, and the US. Imagine what happens when both the EU and the US start to implode simultaneously. Disaster guaranteed.

[timerland]

Well, I believe that a period of continued growth in any economy has to be followed by a correction, at the very least.

We've essentially seen the last decade as that period of growth, with the stock market being incredibly bullish and all economic indicators within the US being up. I think it's sooner or later that some form of financial crisis hits again.

I'm no economist, of course, and I don't know when it's going to happen. But it could be soon given that stocks are already adjusting a bit from their highs.

I'm just holding all the defensive assets at the moment, which includes gold and bitcoin, as 1Referee mentioned. Especially bitcoin, I think it'll be able to outperform a lot of the other asset classes given that it is completely independent from the traditional banking system which will be the hardest hit, and could potentially be seen as a safe haven in such period of crisis.

[exstasie]

You should start right now with lowering your exposure to a system people largely argree about that it will collapse at some point. Why do you think I have been stocking up on Bitcoin throughout the years? Bitcoin is the easiest way for me to actively counter the risks the regular system exposes me to, from within Europe itself, and the US. Imagine what happens when both the EU and the US start to implode simultaneously. Disaster guaranteed.

How does holding BTC hedge against economic collapse? As unemployment and defaults skyrocket, why would people flock to Bitcoin? Even hedge assets like gold decline during economic crises. There's no way Bitcoin could be viewed as a traditional hedge asset like gold at this point either. I think it's viewed as very high-risk, much like speculative stocks in an inflated market.

[Kakmakr]

OP, your post is like a fresh breeze in the early morning. Most financial experts are so blinded by the financial education that they received from the puppet masters of the fiat system, that they stopped thinking for themselves. Their immediate response to Bitcoin is a defensive position that are apposed to the anything that might endanger the current fiat system.

I am glad to see that the educational system, still have some free thinkers and not just sheep that accepts the norm. We need more people like you, to counter the arguments that are made against Bitcoin and Crypto currencies from these fiat slaves. 

[ausbit]

Renowned international stock investor, George Soros, who broke the bank of England in 1992 by shorting the pounds and pocketed over a billion dollars, sounds the alarm of a financial crisis?

Despite China stock market woes and global economy weaken, U.S. economy stays strong.

Why is that the case ?

The effects of real exchange rate overshooting might be the cause.
With the spillover effects from commodity markets of declining oil prices into international asset markets, the U.S. real exchange rate, as an endogenous variable that is system driven, was altered. To conquer this real shock, the central bank exercised their money supply. With effects of short run expectations and exchange-rate overshooting, U.S. economy responded to the impact with greater magnitude than anticipated. To understand how this works, one would require to employ the Uncovered Interest Rate Parity Model, which is too technical for discussion beyond this point.

I mean crisis always happens in somewhere around the world, the trouble is not crisis happening the trouble is why is it so common nowadays. We are getting used to hearing about some country bankrupting and citizens starving and so forth.

Back in the day when chinese workers worked for couple cents an hour or a dollar for a day we didn't really thought about it since we were not chinese. Now there are mo places like that and even countries like venezuela is starving with so many people dead and many more dying there.

USA having a financial crisis is not a new thing but we really need to find the reason why countries are going out like that, we can't have these financial market collapses once every decade, it is ruining the whole world. We need to regulate these banks and whoever else is causing it carefully and more strictly.

[sorrysteve1]

I believe we're in the midst of a mini recession. I don't think that the market is ready to go cataclysmic like in 07/08 simply because I don't think there has been a strong enough recovery in that time. The last few years are the only ones were some positivity has returned but it is a long way from the usual economic sentiment preceding a major market crash. However it is hard to argue with some of the strong market fundamentals and metrics that we're seeing currently and for that reason I do expect a dip for the next 1 or 2 years.

[Pab]

There is already
Over 200 bln dollar vanished from stocks just yesterday
And it looks like that crisis will be deeper what is not best news for crypto market

[exstasie]

There is already
Over 200 bln dollar vanished from stocks just yesterday
And it looks like that crisis will be deeper what is not best news for crypto market

The S&P 500 was lower than this 4 days ago. It was a bloody day on the market, sure, but you make it sound like doomsday. We're nowhere near making new lows.

I actually think this momentum might peter out and we'll see another run at the local highs. There's a lot of stops to pop at $2,800 so there's a good chance we'll go there.

If there's a real crash, I agree about crypto though. It definitely won't help.

[sorrysteve1]

There is already
Over 200 bln dollar vanished from stocks just yesterday
And it looks like that crisis will be deeper what is not best news for crypto market

The S&P 500 was lower than this 4 days ago. It was a bloody day on the market, sure, but you make it sound like doomsday. We're nowhere near making new lows.

I actually think this momentum might peter out and we'll see another run at the local highs. There's a lot of stops to pop at $2,800 so there's a good chance we'll go there.

If there's a real crash, I agree about crypto though. It definitely won't help.

Looking on a daily basis isn't going to be a good representation of the market momentum. I think stock markets will stay in dangerous zones for a while until there is some further clarity on economic conditions in the USA, especially regarding the trade war with China.

As for crypto, a lot of people seem to have the idea that it is competing with stocks for investment and therefore if stocks crash then crypto will grow, but what they fail to understand as the underlying reason behind stock market crashes are that there are less people willing to invest and that carries over to crypto.

[houjinglong]

The market crisis is very likely for the world economic leaders. This phenomenon is only unpredictable. I think the US dollar will become the biggest potential danger in the future, and the dollar system will even collapse. Because the development of unequalness is not supported by the whole world.

[StacksCity]

Personally, I see the possibility for a repeat of history like in the late 90s. A market crisis in the US stock market will arrive most likely because of cooperate bond, but that's not going to happen in 2019.

[ivanst776]

U.S.A will be on their economics problem and will continue to fall if there will be no war in the earth.
Main life of their market is weapon and they need to have war for them to succeed in selling their weapons.
This is the true side of that country, that is why .....

[axecommunity]

The market crisis is very likely for the world economic leaders. This phenomenon is only unpredictable. I think the US dollar will become the biggest potential danger in the future, and the dollar system will even collapse. Because the development of unequalness is not supported by the whole world.

I think that it will affect not only the US but all the countries around the world. In addition, the under developed countries are often hit hard and there are still some countries who have not recovered the losses from the last financial crisis in 2012.

[niublity]

I think this possibility is already increasing. The world economy is about to enter a period of turmoil. US protectionism will undermine the global trading system it has established. Therefore, this will be dangerous. War is accompanied by the economy. Once the economy becomes irreversible. The war will break out and Iran is now the target of the United States.

[charlotte04]

Renowned international stock investor, George Soros, who broke the bank of England in 1992 by shorting the pounds and pocketed over a billion dollars, sounds the alarm of a financial crisis?

Despite China stock market woes and global economy weaken, U.S. economy stays strong.

Why is that the case ?

The effects of real exchange rate overshooting might be the cause.
With the spillover effects from commodity markets of declining oil prices into international asset markets, the U.S. real exchange rate, as an endogenous variable that is system driven, was altered. To conquer this real shock, the central bank exercised their money supply. With effects of short run expectations and exchange-rate overshooting, U.S. economy responded to the impact with greater magnitude than anticipated. To understand how this works, one would require to employ the Uncovered Interest Rate Parity Model, which is too technical for discussion beyond this point.

There would always be a financial crisis wherever places in this world, and it is up to us to how to survive it and be prepare for what is going to happen.