Analyst predicts another big fall in the stock market. Cryptocurrency holders should be on alert.

The stock market may see a second big drop similar to a movement that took place in the 1920s Great Depression, according to analyst Gary Shilling.

Shilling was famous for predicting the 1969 recession and correctly adjusting the direction of US inflation in 1970. The analyst believes that we will have a second fall in the stock market and it would be around 30-40%.

The bear market will be driven by a decline in investors’ expectations of rapid recovery.

“The shares are [behaving] in a similar way to the 1929 recovery, where there is an absolute belief that the virus will be under control and that massive monetary and fiscal stimulus will reinvigorate the economy,” he said.

Shilling believes that history can repeat itself and now we would be in the period of “Hoover recovery” (see the graph). Hoover’s recovery is the period when President Herbert Hoover tried to implement an anti-cyclical policy on public spending and loans to keep business running. See what happened in the Great Recession of 29 and the similarities of what we are experiencing nowadays:

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