Why The Stock Market Crash Will Get Worse

What to watch out for heading into the end of the year

For most of my time as an investor, I was bullish. Aggressively buying and holding stocks made more sense as companies continued to grow their revenue and earnings. Unprofitable companies were narrowing their losses and getting close to profitability. We even saw some of these companies report several profitable quarters and achieve 10x stock price growth.

Now we find ourselves in the reverse scenario, with many assets plunging from their all-time highs. Some stocks have fallen well over 50% from their all-time highs, and it’s easy to think the worst is over. Investors will argue that buying stocks now presents a terrific long-term opportunity despite short-term volatility.

We got here due to a combination of factors. Stimulus strengthened the consumer and propped up stock valuations. Tech companies reported record earnings and revenue growth in 2021, proving the stock market’s resilience during the pandemic. Then came reality. The Fed pumped so much money into the market and created inflation.

By definition, inflation only occurs from increases in the money supply, and only the government has the authority to increase the money supply. Raising interest rates reduces the money supply and helps lower…