The Global Stock Market Crash JUST HAPPENED. And Its Much Worse Than We Could've Imagined…

The Global Stock Market Crash JUST HAPPENED. And Its Much Worse Than We Could've Imagined…

Jack Chapple
664K subscribers
476,715 views
Aug 5, 2024

This is what happened in the Japanese stock market today. This is what happened in the Taiwanese stock market today. This is what happened in the british stock market today. And this is what happened in the american stock market today.

All around the world, stock markets took a tumble. And almost every single big stock took a big dip today. Except for one…

You see, one stock shot up so high today, that it might be signaling to the rest of the world, that something really really bad is about to happen…

But lets start off with where this stock market collapse began, and that is japan. You see, Japans stock market didnt just have a bad day today, but it had its worst day in almost 40 years. In fact, it crashed worse today than at any time during the pandemic. The only other time it was worse was black monday in 1987. An infamous day when the world lost trillions of dollars in the stock market in just a few hours.

But why did this happen, well there are a few hypotheses.

One is something called a carry trade.

You see, Japan over the last few years actually has kept their interest rates low and have experienced very little inflation. And so, what a lot of very big corporations and wall street firms have been doing is borrowing tons of money in japanese yen with low interest rates, and then taking that money and investing it in other currencies and stock of other countries like in australia and the usa who have higher interest rates. Pretty much meaning these large investment firms borrowed cheap money in japan, and have been using that debt to invest in the united states. And its estimated that between 5 and 10% of the entire american stock market is on a carry trade.

But, what happens when that cheap money in japan, has there interest rates go up. You see, japan has not raised their interest rates since 2007. Meaning they have been a safe bet to borrow cheap money for nearly 2 decades. But in march, Japan raised its interest rates for the first time. And they did so again just 5 days ago.

Meaning that now all of the wall streets firms and financial institutions that have been relying on japans cheap borrowing cost, now are worried that their payments will go up on their debt, or that they will no longer have access to cheap money for future investments into the stock market.

And on person who may have actually seen this coming is the renowned investor, warren buffet. A man who has been known for outperforming the stock market for about 70 years, decided to cash out pretty much immediately after hearing this news out of japan. Now this could have beena coincidence, because he has been cashing out slowly over the last 12 months. But 4 days ago, he nearly doubled his cash position, meaning that he expects some sort of market correction or collapse soon.

And that brings us to the next point about why the globa stock market appears to be showing signs of a collapse right now. And that is the fears of a real recession.

You know, one of the interesting tidbits I always bring up is after world war 1, the world was expecting to experience something like the great depression. Essentially something terrible was supposed to happen after the war and spanish flu decimated the world population and global industries. And one somewhat brief recession did happen in 1920 and 1921. A single year recession that was fairly quick but also a very large downwards spike. But then afterwards, the world experienced what was called the roaring 20s. A time when we hear about the glitz and glam and wealth explosion that everyone got to experience. But in reality, only the top half of the wealthiest people got to really reap the financial rewards of the roaring twenties. Because asset prices began to sky rocket and debt was very cheap to borrow. But if you were a lower middle class person or were working as something like a farmer, than you actually lost ground during the roaring 20s.
But hey, as long as the people who owned assets got richer, thats all that matters, right?
Anyways, what followed after the roaring 20s was the great depression. The worst, and longest economic downturn in modern history. A horrible economic decade that essentially needed a world war, to take the world out of this economic downturn.

It Started: Japan Just Broke The US Stock Market

Graham Stephan
4.76M subscribers
281,879 views Aug 5, 2024

Let's discuss the Japanese Yen, why Carry Trades have caused a stock market sell, what this means for federal reserve interest rates, and what you can do to best come out ahead - thanks for watching! Add me on Instagram: GPStephan

Jim Rickards: For God's Sake Listen! "TAKE YOUR MONEY OUT OF THE BANKS" on 2024 Banking Crisis

Plain Finance Reborn
11.2K subscribers
87,140 views Aug 1, 2024

Jim Rickards says that Global Liquidity crisis is coming where the Big Banks, Hedge Funds, and other institutions needs US Dollar in order to cover their collateral needs against their derivatives positions.

What will happen when there's no dollar or the dollar is too expensive? Jim Rickards predicts that someday one big banks or big institution will collapse and it won't be pretty.

James G. Rickards (29 September 1951) is an American lawyer, investment banker, media commentator, and author on matters of finance and precious metals.Thanks for Watching Plain Finance Reborn, share this video to your friends if you find it helpful. Subscribe to our channel for daily videos on Investing, Economy, Finance, Stock Market, Building Business, and more.

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