What triggered the crash?

Hussman Funds/John P. Hussman

Repost from 7-21-2021

Graphic image of a gold king chess piece surrounded by downed pawns

“When the time comes to ask the question – ‘What triggered the crash?’ – remember that this is the least important question. A market crash requires nothing more than a shift in investor psychology from careless speculation to even modest risk-aversion. A market crash requires nothing more than an increase in the risk premium demanded by investors, in an environment where risk premiums have become overly depressed.”

USAGOLD note: Hussman’s latest explores the nature of overpriced financial markets and ends with the premise that “the dogmatic activism of the Federal Reserve [is] at the very center of it all” – for better or worse depending upon your own exit strategy and/or whether or not you put in a hedge.


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