Signs are pointing to another Black Monday. Somebody tell the Fed

Currently, the world is witnessing two major wars - Russia's war against Ukraine and Israel's conflict with Hamas in Gaza. Additionally, the United States is engaged in 'cold wars' with Russia and China. These conflicts have diverted attention from the looming threats to the financial markets, which could potentially lead to another crisis. Over the past decade, central banks in the United States, Europe, and Japan have repeatedly intervened in the bond and equity markets. Consequently, these markets are now experiencing turmoil that could potentially trigger a replay of past crashes.

Economists and financial analysts are increasingly discussing the possibility of another Black Monday - a global stock market crash similar to the one that occurred on October 19, 1987. On that day, the Dow Jones Average plummeted by 23 per cent, marking the largest one-day decline in history. Another Black Monday had occurred earlier, on October 28, 1929, when the Dow fell by 13 per cent. By mid-November, it had lost nearly half of its value. The financial markets have a valid reason to fear the recurrence of Black Mondays.

In a recent commentary, John Greenwood, the architect of Hong Kong's dollar peg, and Steve Hanke, a professor of applied economics at Johns Hopkins University, suggested that the policies of the US Federal Reserve pose a threat to the US financial markets and the economy. They warned that these policies could potentially lead to a severe recession and a repeat of the 1987 Black Monday.