Today the Dow Jones plummeted down from 25,479.42 points all the way down to 25,358.50 points. There was a 120.92 point drop. Then it recovered late in the afternoon and the Dow Jones closed at 25,579.39 points with a 219.16 point gain. The Dow Jones today did not just gain 99.97 points from yesterday. Money was pumped into it to keep the Dow Jones afloat. There was a loss specially in the bond market.

In the bond market today on the 30 year bond yield there was a record low crash. The 30-year U.S. Treasury yield fell to a low of 1.920%. We have to watch the treasury yield more closely because. For every recession for the past 50 years has been preceded by a yield curve inversion months before the economy contracted.

CNBC U.S 30 Year Treasury Chart – August 15, 2019

We cannot keep borrowing money and printing money then assume that everything is going to be alright without any consequences. There is only one remedy which is to cut monetary growth.

Cutting monetary growth and the correction to take place in the market will take time. There is not a quick fix to this situation. The bond yields today across other market sectors were on a downward slope. Below I posted a video from a informative video from Peter Schiff from one of his shows where he covers an update on how cryptocurrencies and much more.

Today the Dow plummeted 800.49 points which is a major indicator of the fallout that many economist have been talking about the past few years. Right now the Dow is sitting at 25,479.42, we can expect the continuance of the August 13, 2019 drop tomorrow going downward all the way down to possibly 21,792.20 the next few days or weeks. Back in December 24, 2018 the Dow dropped all the way to 21,792.20 points.

Since December 24, 2018 the Dow has had the historic ups and downs. If we look into the downward slope of May 13, 2019 with the Dow being at 25,324.99 and the downward slope of June 3, 2019 with the Dow at 24,819.78 points. Starting on May 3, 2019 all the way to June 3, 2019 in a month we saw a 1,685.17 point drop of the Dow. Then we saw from June 4, 2019 to July 12, 2019 a 2,512.25 gain on the Dow Jones.

Through the day I was also watching the S&P 500 which stayed steady with a 85.72 drop. It wasn’t till RBC called for S&P 500 needs to drop even further to calm things down that worried me a bit about today. Here is the original article.

The Market Storm

Today is significant and why the drop could possibly continue is because of the following.

  • Argentina suffered second biggest market crash since 1950 and looking at a possible default on its debt.
  • U.S. Treasury bond yield curve inverted for the first time since 2007.
  • Ex-Fed boss Greenspan says ‘there is no barrier’ to Treasury yields falling below zero today.
  • The People’s Bank of China set the official midpoint reference for its yuan currency at 7.0211 per dollar on Monday.
  • German economy is on a decline slope with -0.1% 2Q 2019.
  • Possible no-deal hard Brexit with EU. Meaning it could cause £30bn economic hit.
  • The United States vs China and European Union Trade War.
  • China to buy more oil from Iran. Oil prices could crash by $30 per barrel if China buys Iranian crude: BofA.
  • Growth of China’s industrial output slowed to 4.8% in July.
  • Australia housing market on a slump.
  • China’s economic growth slows to 27-year low.
  • Chile hurting with US and China Trade war. Copper exports fell 17% and investments in other markets such Argentina.

The biggest problems that needs to be tackled is the US debt of $22.5 trillion dollars. China is the biggest debt holder of U.S debt and second is Japan. Deutsche Bank is also a major global debt holder. The U.S Federal Reserve need to print less money and put a focus on paying the debt.

The markets are slowing down so job creation, export growth, and debt reduction are the keys to mitigate the US Treasury bond curve inversion. If the treasury bonds crash, everything crashes. A major correction needs to happen fast.