Stock market crash or stock market correction, what’s the difference? I’ll try to answer that question with a question – what’s the difference between an Economic Recession and an Economic Depression? I always liked the difference between the two being explained as a recession is when your neighbor loses their job while a depression is better described once you lose yours. 🙂 On a more serious note, I’m not sure who didn’t see this market debacle (which began last month) coming? I mean we have newly invented currencies that exist inside a software program taking off into outer space as the construction inside the S&P 500 Index itself, designed to represent all eleven different sectors of the U.S. economy, has grown to represent only one single sector with a weighting as much as 35% [of the entire index]. So more than one third of the index was weighted in technology stocks trading at all-time highs so that for every $1 invested in the S&P 500 index you were placing 35 cents into high-priced tech stocks. And that’s a healthy scenario? I don’t think so!

We are living in unusual times, runaway inflation hasn’t been an issue since the 1980’s. Combine that with a ton of investors inside these markets in cryptos and other commodities, or bonds, or stocks, many of these folks have never witnessed a sizable downturn in the assets they hold. So this is something especially new for millenials out there that just one month ago seem to “have all the answers”. A deep correction is what the NASDAQ Composite Index is experiencing over these past few weeks, today down now 19% from it’s most recent high. Certainly, based on the change in “easy money” policies, perceived weakness in our leaders in Washington along with economicly destructive policies resulting in runaway inflation, and we could see this tech-heavy composite go much lower than 19%, maybe even falling 30% below it’s recent high? No one knows for sure but I’m more in the camp that certainly a 25-30% debacle is not off the table in order to weed out years of excessive speculation. The last deep tech led debacle began in the year 2000, and by the time it was over two-plus years later, some internet-related stocks had lost as much as 90% of their value, while many tech start-ups dissolved completely. (Please also see my recent article titled, “Great News, Rear-View Mirrors Remain 100% Accurate!”)

As for the broader market indices, such as the S&P 500, it would have fared much better had it not been 35% weighted in “growth-oriented” tech stocks. Unfortunately, given this scenario I would certainly expect it to fall maybe not as much, but closer in line with the tech-heavy NASDAQ Composite. [I do not give any investment advice on here, but describe what I see taking place within the context of historical precedence.] And if someone could not see this party ending, then they weren’t paying much attention to the many challenges we face in this country beginning from January 2021. Just one year ago we ended up with the worst possible choice for President and Vice President to run this country, the problem began right there, it was certainly a “ground zero” for what could take place ahead. This problem is not born by the Communist Chinese Virus, for as long as we had the right [strong] leadership in place, virus related issues were manageable, but we have diverted far from that situation [today]. This weak leadership is already resulting in various hostile regimes across the world now “acting out” [just as I predicted]. So inept leadership beginning one year ago has also escalated runaway inflation in the United States, exacerbating various shortages – including the nation’s vital fuel supply making us most vulnerable to Middle Eastern Islamic led governments. Combine that with a Federal Reserve that overspent on domestic stimulus programs further suppressing interest rates fueling more speculation into a new class of investment, virtual commodities [crypto coins?] and a host of other really bad ideas such as $millions going into blind pools known as SPACS. All this excessive speculation must be undone/unwound before the end of the selling comes to pass… and if it’s anything like the last downturn it’s going to be painful to watch [selected] asset prices, as one can only wonder where all the falling knives may land… hopefully not in your laps this time? 😉