The markets that enter the “danger zone”, the economist who predicted “Black Monday” warns
Mark Skosen, an economist who expected the stock market collapsing in 1987, warns that, given the current economic conditions, financial markets may enter into a “dangerous zone”.
He said at “Skousen” cited the increasing regular risks, unstable economic policy, and eroding the investor’s confidence as major concerns to pay his outlook. interview With David Lin published on June 8.
The “Black Monday” accident in 1987, in which Dow Jones decreased 22 % in one day, remains the largest percentage per day in the history of the United States. Unlike the subsequent decline, it came without a clear economic operator.
Scosen confirmed that today’s environment may be more difficult to move. While the former federal reserve interventions, such as 40 % in the width of the money in 2020, helped to avoid collapse, they also irritated inflation concerns.
Trump policies effect
The economist was criticizing the recent economic policies, referring to commercial wars, political imbalance, and executive transgression that undermines market confidence.
He said that the appointed red flag is the increasing gap between the increasing cabinet returns and a weak country, which indicates what it deems confident in the American economy.
“Use rates rise, and you usually expect the dollar to gather, but it has lost its value during the past six months. This is very dangerous. <...> You see this separation between the return on the treasury and the value of the dollar. People lose their belief in dollars, due to this trade war. I think this is the main factor.
Skousen noted that traditional traditional origins such as gold exceeded with high uncertainty, which is seen as a rational response to regular risks.
He also warned that relying on a large scale on broken lifting and reserves increases weakness and that the main institutional failure can lead to another crisis.
With the construction of volatility, he warned that policy can raise the markets on the edge, calling for an increase in vigilance in the fragile financial system today.
Increase stagnation concerns
Skousen joins other economic experts who warn of the potential shrinkage of the market, indicating the constant uncertainty of President Donald Trump’s commercial tariffs. Although progress in trade negotiations between the United States and China has caused a somewhat cooling fears, economists still say the risks have not disappeared.
At the height of commercial tensions, institutions such as JPMorgan have placed recession for 2025 above 60 %.
While these expectations have been reduced since then, thanks to reducing geopolitical pressure, some remain pessimistic. For example, economist Steve Hanky continues to develop a 90 % deflation probability, pointing to the long -term economic clouds of the Trump era.
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