Stock Markets Exposed
What is the liklihood of a stock market crash similar to the one that cause the Great Depression?
With people retiring in record amounts and withdrawling their earnings from IRA's, 401k's to fund retirements makes me wonder if there are enough people putting money into the market keep it afloat. If more people are selling than buying, then it will decline in value right?
Public Comments
- Anything is possible, but a stock market crash is not what caused the great depression, nor would one cause another today. As to the likelihood, not very likely. A free market is not afloat on new investment, it is the result of supply and demand of existing securities as well as the demand for new issues in hopes of appreciation.
- Does the dog wag the tail or the tail wag the dog. If the overall economy goes into a depression/recession than we could have a large market crash. We could also have a market crash due to fear, terrorism etc. which could lead to an economic depression/recession due to the large loss of wealth. It is a fine balance that takes place in the financial markets.
