The Phaserl


Why Last Friday’s “Bloodbath” Is a Taste of What’s to Come

by Doug Casey, Casey Research:

Stocks around the world are in free fall. As you may have heard, global stock markets crashed on Friday. Here are the final numbers from the massive selloff:

The S&P 500 closed the day down 3.6%. It was the worst day for U.S. stocks since August.

The Nikkei 225, Japan’s version of the S&P 500, plunged 7.9%. It was worst day for Japanese stocks since 2011.

The STOXX Europe 600, which tracks 600 of Europe’s biggest stocks, plummeted 7.0%. It was the worst day for European stocks since the 2008 financial crisis.

Great Britain’s FTSE 100 Index plunged 3.1%.

When the dust settled, $2.08 trillion had vanished from the global stock market.

According to Standard & Poor’s, it was the biggest global stock selloff in history (surpassing the previous record of $1.9 trillion set in September 2008).

The panic didn’t dissipate over the weekend either. The S&P 500 is down another 2.2% today. Overseas, the FTSE 100 fell 2.6%. Today the STOXX Europe 600 ended the day down 4.1%.

In today’s Dispatch, we’ll explain why this could be the start of something much worse than what we saw in 2008. You’ll also learn the #1 way to protect your wealth from this threat.

• Friday’s selloff began with a “vote heard around the world”…

Two weeks ago, we told you Britain was thinking about leaving the European Union (EU).

The EU, an economic union between 28 European countries, has roots dating back to the aftermath of World War II. Its creators hoped it would prevent historic rivals France and Germany from going to war again. Britain has been part of the EU since 1973.

Most folks thought Britain would stay in the EU. But on Friday, the people of Great Britain voted to leave.

The unexpected decision sent shockwaves across global financial markets. European bank stocks have plunged 22% since Thursday. U.S. bank stocks are down 8%. We’ll tell you more about the disaster in bank stocks tomorrow. Today, we’re covering an equally big disaster in the currency markets…

• The “Brexit” caused Britain’s currency, the pound, to crash…

Britain’s currency, the pound, plunged 8% on Friday. It’s now trading at its lowest level since 1985. You can see the pound’s historic drop in the chart below.

Investors fled the pound for other currencies.

The yen jumped 4.5% on Friday. The U.S. dollar gained 2.2%.

Meanwhile, the price of gold soared 4.8%. It was gold’s best day since January 2009.

• Some folks might find it strange to call gold a currency…

After all, many in the financial media consider gold a “barbarous relic.” They say it has no use in today’s economy.

Casey readers know this is propaganda. Gold is not only a currency, it’s real money. It’s preserved wealth for centuries because it has a rare set of qualities: It’s durable, easy to transport, and is easily divisible. Folks in every country on the planet recognize its intrinsic value.

Unlike paper money, gold has survived every financial crisis in history. It’s a safe haven asset that investors buy when they’re nervous.

After Friday’s huge jump, gold is now up 24% on the year. It’s trading at its highest price since July 2014. And it’s likely headed much higher.

• The Brexit has paved the way for other countries to leave the EU…

Shortly after news of the Brexit broke, France’s National Front leader Marine Le Pen wrote: “Victory for freedom. As I’ve been saying for years, we must now have the same referendum in France and other EU countries.”

Ms. Le Pen is the front-runner to become the president of France next year. Two weeks ago, she said “France has possibly 1,000 more reasons to want to leave the EU than the English.”

Politicians in Italy and the Netherlands are also demanding “the right to choose” to leave the EU. BBC reported on Friday:

Dutch anti-immigration politician Geert Wilders said the Netherlands deserved a “Nexit” vote while Italy’s Northern League said: “Now it’s our turn”.

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