The Stock Market Crash Of 2011?

The Economic Collapse
Aug 11, 2011

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How far does the stock market have to go down before we officially call it a crash?  The Dow is now downmore than 2,000 points in just the last 14 trading days.  So can we now call this “The Stock Market Crash of 2011″?  Today the Dow was down 519 points.  Yesterday, an announcement by the Federal Reserve indicating that the Fed would keep interest rates near zero until mid-2013 helped the Dow surge more than 400 points, but all of those gains were wiped out today.  It turns out that the Federal Reserve was only able to stabilize the financial markets for a single day.  Fears about the European sovereign debt crisis and the crumbling U.S. economy continue to dominate the marketplace.  With each passing day, things are looking more and more like 2008 all over again.  So what is going to happen if “The Stock Market Crash of 2011″ pushes the U.S. economy into “The Recession of 2012″?

Just like in 2008, bank stocks are being hit the hardest.  That was true once again today.  Bank of America was down more than 10 percent, Citigroup was down more than 10 percent, Morgan Stanley was down more than 9 percent and JPMorgan Chase was down more than 5 percent.

Bank of America stock is down almost 50 percent so far this year.  Overall, the SP financial sector is down more than 23 percent in 2011 so far.

How soon will it be before we start hearing of the need for more bailouts?  After all, the “too big to fail” banks are even bigger now than they were in 2008.

All of this panic is causing the price of gold to reach unprecedented heights.  Today, gold was over $1800 at one point.  If the current panic continues for an extended period of time, there is no telling how high the price of gold may go.

In the United States, much of the focus has been on the fact that the U.S. government has lost its AAA credit rating, but the truth is that the European sovereign debt crisis is probably the biggest cause of the instability in world financial markets right now.

The European Central Bank has decided to start purchasing Italian and Spanish debt, and there have been rumors that French debt could be hit with a downgrade.  Europe is a total financial basket case right now and unless dramatic action is taken things are going to get progressively worse.

Of course the U.S. is also certainly contributing greatly to this crisis.  The federal government is on track to have a budget deficit that is over a trillion dollars for the third year in a row.  The U.S national debt is a horrific nightmare, but our politicians keep putting off budget cuts.

  • A d v e r t i s e m e n t

The debt ceiling deal that was just reached basically does next to nothing to cut the budget before the next election.  Unless the “Super Congress” does something dramatic, the only “budget cuts” we will see before the 2012 election will be 25 billion dollars in “savings” from spending increases that will be cancelled.

The modest spending cuts scheduled to go into effect beginning in 2013 will probably never materialize.  Whenever the time comes to actually significantly cut the budget, our politicians always want to put it off for another time.

But in the end, debt is always going to have its day.  Our politicians can try to kick the can down the road all they want, but eventually a day of reckoning is going to come.

In fact, if the U.S. and Europe had not piled up so much debt, we would not be facing all of the problems we are dealing with now.

Things could have been so much different.

But here we are.

The truth is that this debt crisis is just beginning.  There is no magic potion that is going to make all of this debt suddenly disappear.

Most Americans have no idea how much financial pain is coming.  We have been living way beyond our means for decades, and now we are going to start paying for it.

Now that long-term U.S. government debt has been downgraded, huge numbers of other securities are also going to be affected.  In fact, according toa recent Bloomberg article, SP has already been very busy slashing the ratings on hordes of municipal bonds….

Standard Poor’s lowered the AAA ratings of thousands of municipal bonds tied to the federal government, including housing securities and debt backed by leases, following its Aug. 5 downgrade of the U.S.

That is the thing about financial markets – once the dominoes start to fall, the ripple effects can be felt for a long, long time.

So if this stock market crash gets even worse, will the Federal Reserve respond with even stronger measures?

They have already basically promised to keep interest rates near zero for the next two years.  So what else can the Fed do?

Well, many now believe that there is a very good chance that we could see another round of quantitative easing.

Not that more quantitative easing is going to help much of anything.  Rather than helping the economy, the last round of quantitative easing just pushed commodity prices through the roof.  But the Fed is unlikely to just sit there and do nothing while financial markets struggle.

But it is not just the financial markets that are having a difficult time right now.  Bad news is coming in from all over the economy.  The possibility that we could soon slip into another major recession is growing by the day.

Unfortunately, our economy is so weak already that a new recession would probably hurt even more than the last recession did.

Mark Zandi, the chief economist at Moody’s Analytics, says that if we have another recession it “won’t feel like a new recession. It would likely feel like a depression.

But the American people are in no mood for more economic pain.  Every recent poll shows that Americans are already fed up.

For example, a brand new Reuters/Ipsos poll found that 73 percent of the American people believe that the country is “on the wrong track”.

So let’s certainly hope that the current stock market crash does not set off another major global recession.  We certainly do not need things to get significantly worse than they are right now.

But whether it hits now or later, the truth is that a whole lot of economic pain is on the way.  The U.S. and Europe have been making really, really bad decisions for decades, and we are not going to be able to escape the consequences of those decisions.

The global financial system is one huge mountain of leverage, risk and debt.  A collapse is inevitable.

When you build a house of cards on a foundation of sand, you should not be surprised when it comes crashing down.

The next wave of the economic collapse is coming, and those that are wise will get prepared.





 
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20 Responses to “The Stock Market Crash Of 2011?”

  1. The Dow will go down to 5000 soon, this crash was predicted last year by two people: youtube dot com / watch?v=X1Tb1u2MSAo

  2. Was watching a TV show on PBS about ten years ago of the old timers who became wealthy during the Great Depression of the 30s. They called the new investors after the market crashed suckers, i.e., basically fools. These fools were pumping in their money keeping the market inflated for a brief amount of time before it would sink again. More fools kept buying what they thought were cheap stocks only to lose all as the market heaved upward then fell back unable to support itself. That’s what the rich, old timers in the US stockmarket think of the individual investor…suckers. I’m sure that the same attitude is still prevalent, too.

    I’d rather own gold, gold I can hold in my hand, till the market completes it’s fall to whatever those that control US money (the Fed) has it’s fill of sucker money.

    • You are holding less gold today than you did yesterday.

  3. Anyone else notice that its ONLY the ‘western’ countries that is having the debt problems? Only the US and its allies? Eventually I think the western powers will agree to ‘cancel’ all debt to each other, begin a-new and leave China holding the bag. Hope it happens soon, we being the ONLY ‘Super Power’ left that can possibly maintain our Christian Heritage and history, we can not allow China to surpass us.

    Can you imagine 50 years from now, watching a China military going in like the USA does and killing white people, muslims, or fellow christians? No, it can’t be allowed to happen, America needs to remain #1 no matter what.

  4. Yeah, but did you hear the manipulation yesterday on the show for gold and silver from Alex and Ted Bundy?

  5. Now it’s even easier to see how the market is manipulated and controlled by super computers owned by the super rich. The individual investor doesn’t have a chance…
    You’d have to be crazy to trade in this environment anyway.
    Fortunes have been made over the past few days by the big players….

  6. IMO, we are looking for a double bottom. As crazy as it may seem, that means a re-entry point is 6,000-6,500.

    How come nobody on wall street ever says it’s a good time to sell. Listen to your stock broker and lose your ass again, or get out while you can and get back in at the bottom. Screw this “investing for the long term”, which means 0% return over 10 year.s

  7. With all of the selling there must be equal buying. Someone has to be buying the stocks sold.

    Those who are selling are primarily moving their funds into gold AND Treasury Bonds/Notes.

    So investors are pulling away their funding/support from major corporations and instead are buying up Government bonds (i.e. debt).

    • such a stupid move, too. bonds are not to be trusted, and the yields are proving to not even keep up with inflation! pitiful….

  8. “They” keep saying, “get prepared…get prepared”…get prepared HOW?

    • Beans, bullets, and booze. Really there is to many situations to prep for but I believe when “they” say be prepared, basiclly it like “don’t say I never said so”. I prep with the basics, food, water, fuel, guns, and booze. Just enough for a 6 month ruff path and enough to defend ur household if say something like lodon roits come to town. And of course prep mentally…don’t lose your head and freak out when shtf.

  9. Lets hope so.

  10. Collapsing the market appears to be part of the plan of the New World Order.

    Osama Obama Biden Bin Laden
    NO COINCIDENCE

    Obama is not the president, he’s the acting president. He disappeared for 2 weeks after his election win only to reappear looking exhausted sitting next to John McCain, with a bad poker face, for a press photo shoot. Obama was turned into a Pentagon puppet ever since.

    Too many stories in the news are completely fabricated to generate chatter for the feds. They have the majority of comments on many news sites, many software generated, and are actively involved in the moderation of sites since the “death” of Osama Bin Laden.

    A military coup d’etat began in 2008 with the introduction of Sarah Palin as John McCain’s running mate.

    Osama Bin Laden is a name and a code. It appears he was created by the New World Order. The New World Order consists of some of the richest people in the world with the goal of overthrowing the US government, some from inside our own government. They are also trying to collapse our currency and are behind all of the “buy gold” hype, not to mention thousands of money making opportunities online and late night infomercials. They are positioned to make billions by collapsing our economy.

    The attacks on 9/11 appear to be attacks on capitalism. The people that make up the New World Order are media moguls, CEO’s and many others. The coup is also the reason why all the CEOs who ran in the last midterm didn’t get elected either.

    You will not read about this in the media since most of the media has been forced to cooperate or have been paid to cooperate.

    What you’re about to learn is true and not embellished in anyway. Here’s what Obama, Osama, Biden, Bin Laden, the FBI’s Most Wanted Terrorists, and Sarah Palin had to do with the last election and the military’s overthrow of our government. Search ElectNoMoreSpys.blogspot and learn the real deal.

  11. It’s not a crash….. it’s a depressed kinetic move in stock prices.

    • Nice one.

  12. the coming depression dot net

  13. Oh it is not a crash , but just a market correction. Just like the housing market, just a mere correction ya see. Everything is just dandy in the land of Oz. Pretty rainbows and sparkly streets of gold.

    Money is honey, and honey is free.
    The market will crash and stock options will flee.
    Jump in the streets and shout out with glee.
    All you have worked for, flushed out to sea.
    Money all gone, leveraged, borrowed and spent.
    Americans can no longer can work, play or pay rent.
    The end is not near, we can still pitch a tent.

  14. i remember back in 04 some friends and i were having lunch dicussing the ‘fake economy’ that was still going strong for us. then came tarp, stimulus, and QE’s. it should’ve collapsed in 08, but they wouldn’t let it die a natural death and still won’t. certainly this monster will die very soon.

    • You know, brother motor, I had an economics professor in grad school who said something that really stuck with me. He said (and I’m paraphrasing), “If the government announced that they were killing the U.S. dollar, there would be rioting in the streets. What they would have to do, is make economic conditions so bad that the people BEG for the dollar to be replaced.”

      He seemed to have a handle on both economics AND sociology, wouldn’t you say?

      • But what motor said (that they wouldn’t let it die a natural death), would that have caused the dollar to collapse? It would’ve caused those entities that received bailouts to collapse sure… but I never understood why that was allowed to happen. TPTB said it was to avoid a financial collapse, but… given the debt ceiling nonsense, the credit rating drop… aren’t we still firmly on that track? Where is the accountability? Where are the reporters asking Hank Paulson, Bernanke, Geithner, Obama questions about this? Seems to me that if we are here watching gold/silver going up over 100% since the bailouts (PM’s being an indicator of financial instability in the economy), our credit rating, raising the debt ceiling… that we should’ve just bit the bullet back then, and maybe we could… instead of still mired in the muck of this mess still, waiting for the shoe to drop… we could be at least righting the ship right now.

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