Here is my response to @VALUETAINMENT Reverse Stock Market Crash and what this means for investing in 2024 – Enjoy! GET MY WEEKLY EMAIL MARKET RECAP NEWSLETTER HERE: | Add me on Instagram: GPStephan

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THE REVERSE MARKET CRASH:
This occurs when prices suddenly balloon upwards, allowing a select few to build a substantial amount of wealth while everyone else gets left behind. According to Valuetianment, this is all part of a vicious cycle where the rich get richer while the poor get poorer.

PAST EXAMPLES:
In 1914, 4 German marks equaled $1 US dollar. However, after Germany lost W W 1, their economy was in shambles. This meant that they had to print so much money, that instead of it taking 4 marks to buy $1 US dollar – it required 1 trillion marks to buy $1 US dollar.

Zimbabwe Currency:
Their economy was extremely mismanaged. In addition to that, the government also printed vast sums of money to finance operations and ramp up production – as a result, this led to a complete loss in confidence in Zimbabwe currency, and caused asset values to skyrocket.

Argentina Currency:
Since 1980, it was said the AVERAGE inflation comes out to 206% per year. They’ve defaulted on their national debt almost a dozen times. They’ve printed so much money that, “in the last 10 years, the Argentine peso has lost 99 percent of its value against the dollar.”

Turkey Currency: Record-high inflation has correlated with record-high stock prices. In Iran, inflation reached a high of more than 50% with even higher stock prices – even Venezuela saw the same trajectory, as high inflation correlated with a reverse stock market crash upwards.

In terms of how this relates to the overall context of a “Reverse Market Crash” in the United States – Patrick made the point that every other economic catastrophe was also induced by temporary “negative’ interest rates – and, just like those other countries, we’ve also seen a dramatic run-up in the price of stocks, with the SP500 increasing by 6.5x since 2009.

Also, in all of these scenarios, there’s an abundance of borrowing and money printing, the government steps in to regulate the markets and enact price control, and this followed by a loss in confidence in the economy.

As far as what’s happening here in the United States, it’s important to mention this:

For Germany, their market increased 600% in 3 years – but, relative to the US dollar, their market declined by over 80%, completely negating any profits that were seemingly made on paper.

Zimbabwe is even more extreme: their index increased from 1000 to 553,000 – but, relative to US dollars, their market has crashed by more than 90%. The same thing also applies to Argentina – which saw a huge stock market spike – but, that actually equates to a 61% loss in purchasing power when converted to US dollars. In each of those cases, high stock values were NOT correlated with high or increasing purchasing power.

That’s why I don’t think it’s quite a fair comparison to infer that the United States could face a similar fate to countries that see 200% inflation year over year, while the stock market sees a 10,000% reverse crash upwards. Systematically, there are so many fundamental differences to the point where, if that happens here – we have way bigger problems to deal with.

As far as what you can do, I think the really boring basic philosophies still hold true: Save more than you spend, invest in a diversified portfolio long term, and focus on what you can control, like your overhead, job skills, employability, and whether or not follow my newsletter 🙂

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It Started: The Reverse Market Crash Of 2024

In a turn of events that has left economists and investors in a state of shock, the global financial markets experienced a reverse crash in 2024. This unexpected and unprecedented event has sent shockwaves throughout the global economy and has left many scrambling to understand the implications of this unique situation.

The reverse market crash of 2024 began with a series of unexpected and sudden surges in stock prices across various sectors. What was initially seen as a hopeful sign of recovery quickly turned into a bewildering reversal of fortune, as stock prices continued to climb at an unprecedented rate. As the market soared to new heights, the sense of unease and confusion among market analysts and investors grew.

One of the most striking aspects of the reverse crash was the speed at which it unfolded. In a matter of days, the stock market saw gains that would typically take years to achieve. This rapid escalation created a sense of unease among investors, who were unsure of how to navigate this new and unfamiliar territory.

As the market continued to climb, the reverse crash began to have ripple effects across various sectors of the economy. Companies that had been struggling just weeks before suddenly found themselves in a position of economic prosperity, while others struggled to adapt to the new landscape.

The reverse crash of 2024 also had a profound impact on global trade and investment. With stock prices reaching unprecedented levels, many investors and financial institutions found themselves in a position of uncertainty, unsure of how to navigate the rapidly changing market conditions.

In the wake of the reverse crash, economists and analysts have been working tirelessly to understand the underlying causes of this unexpected turn of events. Some have pointed to a combination of factors, including a surge in consumer spending, a rapid expansion of the technology sector, and a newfound sense of optimism among investors.

Despite the uncertainty and confusion that has accompanied the reverse crash, there are also signs of hope and opportunity. The sudden surge in stock prices has created new opportunities for investors and businesses, and has sparked a sense of economic optimism that has not been seen in recent years.

As the global economy continues to grapple with the aftermath of the reverse crash of 2024, it is clear that this event will have a lasting impact on the financial markets and the broader economy. The sudden and unexpected nature of this reversal serves as a poignant reminder of the unpredictability of the global economy. As investors and economists work to understand and navigate this new reality, one thing is certain: the reverse crash of 2024 will be remembered as a defining moment in the history of the global financial markets.