The Global Market Crash Affects Us Even If We Aren’t Investors

(Psst: The FTC wants me to remind you that this website contains affiliate links. That means if you make a purchase from a link you click on, I might receive a small commission. This does not increase the price you’ll pay for that item nor does it decrease the awesomeness of the item. ~ Daisy)

Author of How to Prep When You’re Broke and Bloom Where You’re Planted online course

Some folks are calling August 5, 2024 “Black Monday 2.0.” It could be remembered as the day when the global market crash began in earnest.

The following should not be considered financial advice. If you are looking for financial advice, I recommend speaking to an expert who is not vested in the stock market system. I’m just explaining what has been explained to me in the clearest way possible.

Some background on the global market crash

While we in America were still sleeping, in Japan, the stock market there was crashing. Traders has been borrowing against the yen at 0% and investing that money elsewhere. Then, rates went up. Suddenly they were upside down in their investments, which means they owed more than the investments were worth. Stocks fell further and further throughout the day. The Japanese market, the Nikkei, crashed 4,451.28 points –  its largest-ever loss in terms of points.

It didn’t take long for the carnage to spread across Asia. South Korea and Taiwan also hit historic lows.

European markets experienced six month lows, and by the time we woke up here in America, our own stock market opened 1000 points down from Friday. Meanwhile, many of the top American brokerages suffered digital “outages” on Monday, which means that regular folks couldn’t access their investments and make changes. The accounts were completely inaccessible for the day, but were back to normal on Tuesday. The brokerages blamed the outages on “technical difficulties.”

Sure.

In other Monday news, the tech sector, particularly the “Magnificent Seven” (Alphabet/Google, Amazon, Apple, Meta, Microsoft, NVIDIA, and Tesla) all saw a plunge in value, with a slight recovery later in the day. All in all, these tech stocks lost $653 billion on Monday. But this closely follows a $744 billion decline on July 24, so it’s not good news. Before you go start a joint Go-Fund-Me for Bezos and Zuckerberg, rest assured, they still have plenty of money. It’s the folks whose retirement funds are invested into Big Tech who need to worry.

There are other factors in play here: a bad jobs report on Friday (they can’t hide the truth forever), Google was declared a monopoly by courts, people are beginning to doubt whether there’s any money in AI, and Warren Buffet’s decision to cut his Apple holdings in half. Fears of a recession are greater than ever.

Bitcoin, long considered a safe haven, also fell on Monday, losing 15% of its value. Ethereum, another cryptocurrency, lost 22%. BNB, Solana, Dogecoin, XRP, Shiba Inu, and Cardano are all down between 16% and 18%.

How does this affect us normies?

These companies are overvalued – so it’s not really shocking that these drops occurred. It’s all about how much they are really worth vs. how much people will pay.

But here’s how it affects us directly.

First, if you are invested in the market and happen to be into any of these companies that had substantial drops, you are watching your investment dollars disappear right before your very eyes. For example, if you had 1 Bitcoin worth around $73,000 in March, your Bitcoin on Monday would be worth around $51,000. Multiply and subtract as is applicable to your situation. It’s likely that things will go back up (they call this a dead cat bounce), only to fall yet again.

This means that folks who are depending on their investments for retirement may be looking at a far more lean future than they expected.

But what if you aren’t invested in the stock market? Should you care?

Absolutely.

A crash in the market affects our economy broadly and some of it is purely psychological. If you have no confidence in our economy, are you going to spend as much money? Are you going to invest in these companies that are plummeting in value? Of course not. You’re going to become far more conservative with your money.

This, in turn, means that the retail sector suffers, and then employment suffers as jobs are cut in response to the slowdown. Then, the prices of things go higher as retailers try to make up their losses. The same is true with service industries. Are you really going to go get your nails done or go to the spa when you’re pinching pennies?

It may become more difficult to get loans and if you do get them, you may pay higher interest.

All this leads to an economic recession, which can eventually (or even suddenly) lead to an economic depression. We’ve seen all this before.

What can you do?

Again – this isn’t financial advice. You should speak to an expert for that.

There are a few things you can do to ride out the storm.

Invest in needs.

First things first, make sure you are well-stocked with shelf-stable food, incidental needs, and, if you can afford it, land. Learn skills that help you produce the things you need or repair the things you have.

Get as financially stable as you can.

If you’re able to become debt-free or remain debt-free, that will take you a long way toward future financial security. Get your budget to a level you can afford on a portion of your salary as opposed to spending every dime and living paycheck to paycheck. Take care of any medical or dental issues now, while you still can afford to do so.

Rethink investing and savings.

Finally, once you have the other things handled, it’s time to focus on the bigger picture. A lot of folks make the mistake of thinking they should be hoarding gold and silver like a dragon, but this doesn’t come until after you’ve covered the basics. Once your preps are in order, your debts are paid off, and your home, vehicle, and family are maintained, then it’s time to put some money back for later when the crisis is over.

The purpose behind stocking up on precious metals is that gold and silver will hold their value when the dollar may not. After the economic disaster is over and our society is beginning to recover, precious metals will have value regardless of what has happened to the dollar. Even if we have moved on to an entirely different currency by then, whether or not the dollar is still the reserve currency of the world, or whether we have turned into a cashless society, the value of a precious metal remains consistent. When you need to make a payment on your property taxes or some other expense, you can convert precious metals to whatever the currency is, at whatever value the currency has at that time.

A lot depends on how you personally want to do it. If you are thinking that gold might be an important bribe, a suggestion from Selco is to buy a lot of plain gold wedding rings. You can slip one of those off your finger to offer a guard or other person you might be bribing, and nobody will expect that you have six more just like it. It will seem like it’s probably the only thing you have. I have followed this advice and often hit up pawn shops to check out their bands. I’ve also gotten some good pieces from yard sales mixed in with bags of “costume” jewelry.

While jewelry is one way to purchase precious metals, buying bullion or coins may be the best method. This is how governments and central banks create their reserves. Bullion is gold and silver that is at least 99.5% and 99.9% pure and is in the form of bars or ingots. This medium is ideal because of its purity, set weight, and recognizability. I purchase all of my solid gold and silver this way from ITM Trading. They actually offer a completely free strategy session if this is something you’re considering. I strongly suggest you set up a call – you’re under no obligation to buy. But the information you receive may make it some of the most valuable financial education you ever get, particularly given that our banking industry is in such dire straits.

Metals are a unit of storage.

Just to be clear, gold and silver pieces are stores of personal savings. They aren’t emergency funds, nor are they generally easy to spend. (There are some exceptions, and I’m generalizing here.) This is for money that you do not need immediate access to, although you can liquidate them reasonably easily today. This investment is made so that when things finally settle down after the current economic crisis, you still have wealth, and it hasn’t all dissolved or dwindled in value like money in the bank can do.

Has the global market crash affected you yet?

Were you affected by Monday’s dismal numbers? Are you concerned about the future of our economy?  Do you think this is only the beginning? Are you taking any steps to prepare?

Let’s discuss it in the comments section.

About Daisy

Daisy Luther is a coffee-swigging, adventure-seeking, globe-trotting blogger. She is the founder and publisher of three websites.  1) The Organic Prepper, which is about current events, preparedness, self-reliance, and the pursuit of liberty; 2)  The Frugalite, a website with thrifty tips and solutions to help people get a handle on their personal finances without feeling deprived; and 3) PreppersDailyNews.com, an aggregate site where you can find links to all the most important news for those who wish to be prepared. Her work is widely republished across alternative media and she has appeared in many interviews.

Daisy is the best-selling author of 5 traditionally published books, 12 self-published books, and runs a small digital publishing company with PDF guides, printables, and courses at SelfRelianceand Survival.com You can find her on Facebook, Pinterest, Gab, MeWe, Parler, Instagram, and Twitter.