#BlackMonday: U.S. Stock Market Crash Blamed On China, Is Ron Paul’s ‘Day Of Reckoning’ Here In 2015?

The U.S. stock market crash this 2015 is being already called Black Monday by those on Twitter using the #BlackMonday hashtag. Some are blaming China’s stock market for the sharp drop, but Ron Paul predicted the Federal Reserve may cause a “day of reckoning.”

In a related report by the Inquisitr, the U.S. stock market drop is one of the biggest since 2008, and even the Apple stock is in bear market territory for the first time in two years.

According to Vox, the U.S. stock market crash “was by no means catastrophic by historical standards, but it is having an outsized psychological impact on stock owners.” No one knows for certain why the U.S. stock market drop has occurred, but some blame China.

“Broadly speaking the key source of negative sentiment seems to be a run of bad economic news out of China. This has been a story all summer, but the declining price of Chinese currency since mid-August has made it clear that there are real international implications,” Vox reported. “You can see the central role of China-related fears in the extraordinarily poor performance of companies like Apple (down over 6 percent) that have relied on Chinese customers to fuel much of their recent growth. The China effect is also visible in the price of a wide range of raw materials, all of which are falling in anticipation of weaker Asian demand.”

Even if it’s not China, the bears are starting to stampede like a bull-like herd due to fear.

“Fear has taken over. The market topped out last week,” said Adam Sarhan, CEO of Sarhan Capital, according to MSNBC. “We saw important technical levels break last week. Huge shift in investor psychology.”

In order to prevent panic selling, the NYSE is implementing Rule 48 on Black Monday, which reads as follows according to the Wall Street Journal.

“(a) In the event that extremely high market volatility is likely to have a Floor-wide impact on the ability of [Designated Market Makers] to arrange for the fair and orderly opening, reopening following a market-wide halt of trading at the Exchange, or closing of trading at the Exchange and that absent relief, the operation of the Exchange is likely to be impaired, a qualified Exchange officer may declare an extreme market volatility condition with respect to trading on or through the facilities of the Exchange.

(b) In the event that an extreme market volatility condition is declared with respect to trading on or through the facilities of the Exchange, a qualified Exchange officer shall be empowered to temporarily suspend at the opening of trading or reopening of trading following a market-wide trading halt: (i) the need for prior Floor Official or prior NYSE Floor operations approval to open or reopen a security at the Exchange (Rules 123D(1) and 79A.30); and/or (ii) applicable requirements to make pre-opening indications in a security (Rules 15 and 123D(1)).”

Ron Paul has a different theory for the reasons behind the U.S. stock market crash. Paul says he was “utterly amazed at how the Federal Reserve can play havoc with the market,” referring to how stocks surged in June. Paul believes “the fallacy of economic planning” has created such a “horrendous bubble” in the bond market that “stock market chaos” would eventually follow.

Although Ron Paul could have not known about Black Monday at the time, he believed investors would eventually “lose confidence” in the Federal Reserve and Americans would witness a “very big crash.”

“I don’t think there’s any way to know what the [timeline] is, but after 35 years of a gigantic bull market in bonds, [the Fed] cannot reverse history and they cannot print money forever,” Ron Paul said, according to CNBC. “I think [the crash] is going to be much greater [than 10 percent] and it will probably go a lot lower than people say it should. I don’t think it’s going to be just a correction.”

[Image via Coastline Financial Solutions]

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