Economic Collapse: Strategist Says We’re on the Verge of a Stock Market Crash

economy collapseU.S. equity markets could be on the verge of a stock market crash and investors should begin rushing to the exits. At least, that’s the view of market strategist Komal Sri-Kumar.

“You’ve gone up a lot thanks to all the liquidity,” the president of Sri-Kumar Global Strategies told CNBC’s Squawk Box in an interview earlier this week. “If the Fed were to ever increase interest rates [I see] 20% plus in terms of the downside.” (Source: CNBC, August 6, 2015.)

Unlike the Federal Reserve that has reportedly said the interest rate will go up this year, Sri-Kumer doubts whether policymakers in the Fed will be able to hike the rate in September or December.

Sri-Kumar said that despite the aggressive money printing by central banks which have saved equity markets globally from inevitable crises, he believes that crashes have to happen.

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“Eventually you can not defy gravity, it has to come down.”

When he was asked about alternatives in the event of a stock market crash, he foresees a bond market as an alternative while he outlined his prediction for bond yields. He expects a long-term move on the 10-year Treasury yield to 1.5% and short-term yield to be below two percent.