Economist Ted Bauman is sounding the alarm and is calling for a stock market crash of at least seventy percent. Most traders on Wall Street would disagree because they feel that US stocks still have a long way to run. However, Ted Bauman feels that stock prices are way overvalued and believes investors should start to adopt more defensive investing strategies. Mr. Bauman earned his history and economics degrees while living in South Africa. Over the years he has become an expert on low-risk investment strategies. He currently writes three newsletters that have enabled his subscribers to make better financial decisions. He’s now advising his followers to beware of several factors that can cause a stock market crash in the near future.
One factor that could cause the stock market to crash is higher interest rates. Ted Bauman and other prominent economists feel that the US economy cannot handle higher interest rates. So far the Federal Reserve believes the US economy is very strong and they plan to continue to hike rates for the next few years. Higher interest rates are going to make it harder for the federal government to service the national debt. Many individuals and corporations will also have a hard time with their debt obligations as well. These factors could slow down the economy. Many investors will leave the stock market and will go to the bond market when yields become more attractive. This will result in downward pressure for the US stock market.
Ted Bauman also believes that the trade war between China and the United States could eventually bring down stock prices in the US. The Trump administration has placed tariffs on Chinese exports and the Chinese government has responded with its own tariffs in retaliation. The Chinese could retaliate further against US multinational companies who rely on business with China. Losing this business will cost billions in revenue for these companies and the share price of many of these companies will be hurt as a result. Many individuals feel that the trade war could push the world into a global recession if China and the US don’t come to terms.
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