Why Everyone has failed to Predict the Stock Market Crash
Why Everyone has failed to Predict the Stock Market Crash
Michael Cowan: 10-31-2025
For years, analysts have been predicting “the big one”—the market crash that would reset asset prices across stocks, real estate, and crypto. Yet, despite seemingly unsustainable valuations and glaring economic cracks, the market indices continue to defy gravity, often setting new highs.
Why haven’t the predicted crashes materialized? Are the bears fundamentally wrong?
According to economic analysis by Michael Cowan, the failure to predict the crash stems from a fundamental misunderstanding of the crisis itself. The real danger isn’t a traditional market crash; it’s a slow, insidious economic collapse driven by the debasement of the US dollar and the global fiat currency system.
The asset bubbles we observe are merely the symptoms of relentless monetary expansion.
How can the stock market thrive while the average consumer struggles?
The answer lies in the central banks’ actions. Following global crises, central banks have consistently chosen the path of least resistance: injecting trillions of dollars into the financial system.
This process—known colloquially as “money printing”—doesn’t flow into productive ventures or raise average wages; it primarily chases existing assets, inflating their prices.
The result is a stock market that no longer reflects the underlying health of the economy, but rather the sheer volume of new currency chasing limited assets.
When governments intervene to prevent a crash, they simply print more money, guaranteeing that while asset prices may hold stable (or even rise in nominal terms), the value of the currency used to measure them erodes dramatically.
It’s not that the assets are becoming more valuable; it’s that the dollar is becoming less valuable.
To understand the inevitable outcome of this policy, we must look at historic examples of currency debasement.
Consider the case of Venezuela. During periods of hyperinflation in Venezuela, the local stock market indices soared. For an investor looking solely at local currency gains, it appeared there was massive growth. However, when those gains were measured against a stable foreign currency like the US dollar, the “growth” was wiped out entirely.
The local market gains were simply a mathematical reflection of a collapsing currency.
The US dollar’s status as the world’s reserve currency currently provides a powerful cushion, delaying the Venezuelan-style hyperinflation that other countries experience. But this reserve status is not permanent, and the trend line is clear.
Since the Federal Reserve was established in 1913, the purchasing power of the US dollar has plummeted by an astonishing 97%.
The decoupling from the gold standard in 1971 accelerated this trend, allowing governments to expand the money supply virtually unchecked, leading us directly to the current asset bubbles.
History offers a stern warning: since the 1700s, the average lifespan of a fiat currency has been just 27 years. The US dollar has far exceeded that average, holding reserve status for roughly a century—a cycle economists argue is now reaching its inevitable conclusion.
The US national debt is now astronomical, and the interest payments alone are becoming unbearable. Politicians, unwilling or unable to enact the necessary fiscal reforms, face a stark choice: default (politically impossible) or continue to inflate the currency until the debt burden becomes manageable in relative terms.
This unsustainable cycle points toward a forced monetary reset. While the form this reset will take is unknown, central bank digital currencies (CBDCs) are often discussed as a likely vehicle. CBDCs would allow governments unprecedented control over the flow and use of money, effectively giving them the tools to enforce a new economic paradigm designed to stabilize their debt obligations.
Panic is unproductive, but preparation is essential. If the real crisis is the erosion of purchasing power, then our focus must shift from predicting a market drop to securing assets that retain value regardless of the dollar’s instability.
The current economic environment is not one of impending disaster, but one of ongoing transformation. The market hasn’t crashed because the government has been propping it up with newly printed money—a policy that simply shifts the cost directly onto the savings and purchasing power of every citizen.
Understanding that the value of the currency is the true battlefield is the key to surviving the coming monetary reset.
For an extensive deep dive into the history of fiat currency failure and detailed insights into the potential monetary reset, we highly recommend watching the full analysis presented by Michael Cowan.