Dow drops over 1,000 points in one week


This type of selloff has not been seen since 2008 when the housing-bubble collapses, primed by the US Federal reserves’ decade low interest rates.

Since then the Fed has added nearly 8 trillion into the economy to keep many insolvent businesses and banks in business and to re-inflate the housing-bubble. 

In the process, a massive stock-market bubble was created, as the Fed has kept interest rates near zero for 7 years. 

The 1,000 Dow drop this week was precipitated by China’s stock market crash followed by their move to devalue their currency in an attempt to help their exports.  Aug 11 was the markets biggest one-day loss in China’s stock market in the past two decades.

The US Fed has been talking about raising interest rates for years, but the economy is just too weak for them to do so.  Now it looks like the US is headed into a recession and the Fed cannot lower the interest rate.  All they can do is print money, and that is most likely what they are going to do. 

But after QE1, QE2 and QE3 – 8 trillion dollars – and no recovery, QE4 is likely to be bigger than all three combined.

The weekend maybe a time for traders to find some good news to stop selling, or it may be enough time for the news to spread about the massive selloff and cause everyone to join the selling on Monday.

August 24, 2015 – could be the next “Black Monday”

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