Today marks 31 years since the famous "Black Monday" global stock market crash. It started in Hong Kong and quickly spread west paralyzing Europe and unleashing devastating blow to DOW that plunged by a then-record of 508 points - a 22% decline in the index.
Photo Credits: Business
A similar percentage decline today would take the DOW down about 5500 points, and possibly the global economy with it. As I was going through the data these were some of the findings, President Reagan at the time was talking about soaring deficits as the cause while others were pointing out extreme market valuation as the chief reasons. One of the obvious variable then and still exist now that most people haven't highlighted is our "interconnections". In fact, each subsequent market crash and most recent 2007-(08), had devastating effects on some countries even when they played a very small role in the root of the problem.
Today the realities are worrying with countries facing unprecedented debt, soaring global deficits and in some cases extreme market valuation. As the saying goes, "you sow what you reap", one hope that in the likelihood of a similar event cushions are put in place to alleviate the eventual suffering. Nonetheless, the matter isn't a simple one with several micro and macro factors at play, now we are facing 'populism' fuel ironically by an experiment that should have brought us together in the name of "Social media". The results facing us are hard to swallow with the actions of some Central bankers and governments debasing the purchasing power of their people. Global debt sadly is being packaged in fancy instruments and sold on an open market, those uninformed grab at the opportunity only to be told we are "defaulting" on our obligation. Developing countries are ranked and given unfair and at times predatory financing rates while others are loaded with debt by greedy politicians looking after themselves and financiers.
The challenges are great, in the Caribbean and others small island countries the realities and cost of Climate change is starting to hit home. We can't agree whether its man-made or a natural phenomenon but as an islander I can definitely say things are changing, in fact, traditional cities throughout the Caribbean must now face the difficult decision of relocating their towns and in some cases entire villages. Is this a bill that these islands should foot on their own when they are less than 0.01% contributors of the problem. But in the name of populism to heck with anyone problem, let me secure my own, let them deal with their problem. Remember, just in case there is something profitable there, we can always buy it for 10% of the value and sell it 110% on the market, in any case, they don't have a voice and they need the money anyways.
Its 31 years since the "Black Monday" global market meltdown, what has happen since only points to the fact on its current course we are heading down the road of anarchy and chaos. The questions you may ask after reading this, can we experience a "Black Monday"? The answer is simple, I honestly don't know but what is obvious the seeds have definitely been sowed. I believe what is important is that we should continuously look and build a system that is resistant to the realities we face. Financially I have always admired the precious metals enthusiast, so I always like the idea of Gold and Silver but I think our best hope of true freedom and empowerment is in Bitcoin and Blockchain Technology. The path forward is to build on top of this technology and encourage decentralization.