It just depends on how crazy the frenzy becomes before the crash. In the Dot Com crash the NASDAQ dropped almost 80%. I believe I commented on the old board in 1999 when Steve Ballmer said Microsoft was overpriced due to a gold rush mentality. When the president of a company tells you their stock price is too high, it's good to listen.
The 2007 financial crisis was really more of a serious but garden variety recession until oil became an external trigger that finally took down the entire financial system. Oil moved up to $145 a barrel in July of 2008 and just sucked up too much investment and cash flow out of the system to support the stupidity in the housing and financial markets.
It seems to me that the next one will be caused by the tsunami of world wide debt. Given no external trigger central banks will continue to flood liquidity into the system at zero/negative interest rates until the system simply collapses under the weight of it's stupidly high burden.
For a while, Powell had a backbone and was trying to ease the US away from debt creation without creating a recession. When the president began badgering him on Twitter and finally asked if Powell was a bigger "enemy" of the US than China, he folded. And with that, any chance we had of easing away from the edge folded as well.
So will there be a trigger and if so, what will it be? Can climate change cause a large enough problem or is that issue still 20-30 years away? How about a massive flu or other pandemic? What's the tipping point for Coronavirus where people stop traveling and stop going to events where thousands of people are crammed into small spaces? If the system doesn't collapse under it's own weight, there will be a trigger. It might be next month and it might not be for several years.
Whatever causes the financial system to collapse, the meltdown won't be small and only the well prepared will survive financially.
AI
