In 2024, the big crash is coming
Since the beginning of this year, the S&P 500 has risen 25%, the Dow Jones has risen 13%, and the Nasdaq, which is dominated by technology stocks, has risen 44%.
But recently, American economist Harris Dent poured cold water on it, saying"This bull market is the result of 100% artificial money printing, and this huge bubble will burst in 2024, when the US stock market will crash even worse than the Great Depression of 1929."
Harris**:
"Starting in 2024 and going on for more than a decade, the S&P will be 86%, the NASDAQ will be 92%, and cryptocurrencies will be 96%, so that's a big deal. ”
According to Harris, the US stock market crash is imminent, and investors should liquidate their positions immediately.
Because such a decline not only exceeded the financial crisis in 2008, but even exceeded the Great Depression in the United States in the last century, which can be called the "largest stock market crash" in history.
Why would Harris make such a **?Is it really as Harris said, the US stock market will break out in 2024 and completely collapse?
The reason why Harris made this kind of ** is actually very simple, the United States ** has risen too much this year.
The three major U.S. stock indexes have skyrocketed, while the U.S. macroeconomy has fallen far short of the performance of **.
Various macroeconomic indicators in the United States show signs of recession, such as the recent non-farm payrolls data that fell sharply short of expectations, and the soaring US stocks have detached themselves from the US macroeconomic fundamentals, so they will usher in **.
Some people may think that ** has little to do with economic growth, but in fact, ** cannot be separated from the real economy too much, especially US stocks.
Since 2008, the United States has embarked on a long-term low interest rate policy, printing more than $27 trillion in money in 15 years, and putting a lot of water.
Although the United States can rely on an annual deficit of nearly $1 trillion to export currency, under the US interest rate hike, the US dollar liquidity and a large amount of capital flow back to the United States.
And the over-issuance of money will lead to two results, one is to push up inflation, the other is to push up asset bubbles, or both, which is also the fundamental reason why Harris made this **:
The Americans have artificially created an excessively high bubble and will have to pay for the previously loose monetary policy for a long time to come.
Especially at present, inflation in the United States has continued to decline, the CPI has come to 3%, the number of non-farm payrolls has fallen sharply, and the debt of small and medium-sized enterprises is heavy.
It is for this reason that Harris fired directly:
"Any broker who encourages you to invest in an account should be shot to death. ”
U.S. stock prices have soared this year, thanks in large part to the development of artificial intelligence, or generative AI.
Companies that provide computing power, including NVIDIA, AMD and Intel, as well as traditional giants such as Microsoft, Google, Amazon, and MATA, which develop big prediction models, are accelerating their layout in this area and reaping dividends.
From the perspective of market capitalization, the value of technology accounts for more than one-third of the total market value of U.S. stocks.
But the key problem is that there is a bubble in the technology stocks in the US stock market at the moment, according to the CNNMONEY Fear and Greed Index, the relevant indicators of US technology stocks are already at a high level, with the index reaching 79.
This means that there is an obvious "overbought phenomenon" among American investors, and the United States should be the only one.
So in the near future, we can see that hedging **builds a lot of shorts**, and some tech giants have also heard the wind and started to sell**.
For example, Nvidia executives sold 1$800 million in ** cashed out, Zuckerberg and Mata sold $200 million one after another, all are obvious signals.
Therefore, not only Harris, but also for the US stock market in 2024, in fact, everyone's expectations are not optimistic, but Harris is too extreme, once the technology stock bubble bursts, the spiral effect is likely to sweep the entire US market, really bringing a big crash.
Some people may think that Harris is alarmist, after all, bubbles are everywhere, especially with such a large volume of US stocks, it is not normal to have no bubble.
But let's not forget that the current situation in the United States is not what it was in the past, and financial markets are facing the threat of a liquidity crisis.
Since June last year, the Federal Reserve has started the balance sheet reduction cycle, as of October this year, it has reduced its balance sheet by 1 trillion US dollars, and this is not over, the Fed will continue to shrink its balance sheet at a scale of about 60 billion US dollars in the future.
According to the Fed's expectations, the balance sheet reduction will continue until 2025, in other wordsIn fact, the whole of next year will be in the Fed's balance sheet reduction cycle.
Therefore, even if the Fed starts a cycle of interest rate cuts next year, the shrinkage of the balance sheet will not stop, and this will inevitably continue to extract dollar liquidity from the market, posing a threat to **.
On the other hand, the problem of the U.S. fiscal deficit is intensifying, the U.S. Treasury keeps issuing bonds, and the scale of the U.S. debt is accelerating and has now reached 339 trillion dollars.
You must know that the funds in the market are limited, and the more bonds issued by the U.S. Treasury, the greater the liquidity drawn from the market, which will cause similar effects to interest rate hikes and balance sheet reduction, further reducing the liquidity of the United States.
When the liquidity crisis hits, the bursting of the bubble in U.S. technology stocks will also become a high probability event, which is likely to further collapse the U.S. market, and the black swan will erupt, causing Harris to become a prophecy.
Write at the end:
Although the Dow Jones index has just broken through 37,000 points, setting a record price for the third time, the dark clouds over the head of the US stock market have not dissipated.
With the Fed continuing to shrink its balance sheet next year and the U.S. Treasury issuing a large number of bonds, I'm afraid that next year's U.S. technology stocks and even the U.S. ** will have a hard time.