Stock Market Crash 2020: Welcome To The End Game

The comments below are an edited and abridged synopsis of an article by Clem Chambers

The Nasdaq is on its final run and is going vertical, a classic end-of-bubble move. This is trader heaven and it turns into speculator hell for those who think that markets go up forever. It could go up a long way in price, but it won’t go for long in time. It could last to Christmas or it could fold tomorrow, but unless this bubble is cut down by the Fed, the final move will be large and quick.

 Stock Market Crash 2020: Welcome To The End Game | BullionBuzz
2020 What’s Next?

Attempts to pump up the economy with new money only result in the cash going straight into equities and the tip of the equity spear, the giant high-beta-story stocks. This is a malfunction of the QE mechanism that supports asset prices and slowly trickles the benefits of this support down the pyramid of wealth. Now the game is up, because the new money is going straight into this bubble of financial assets that is spiraling out of control.

If we get a Nasdaq bull vertical that is the end of this chapter of the process, it will be followed by a crash as everyone dashes to the exit in a blaze of wealth destruction.

The Fed needs to stop this, and quickly; it appears to be trying to do so by tapering its balance sheet, but the bubble is still growing and if it doesn’t stop soon, it will do what bubbles generally do: erupt, then collapse. The final eruption before collapse looks to be underway, and we can only hope it doesn’t happen.

If it does enter the terminal bubble phase and then collapse, it will be the second blow to the US and world economies, which repeats the 1930 narrative of the one-two punch of twin crises. In the Great Depression, it was a stock market crash followed by a banking crisis. Here, it will be lockdown followed by stock market crash.

It won’t be hard to see it coming because, if the Nasdaq goes vertical, it will be hard to miss. Let’s hope the Fed can keep a lid on it, because if they can’t, we are in deep trouble.

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