The simplest answer is “because the economy, the global economy is indeed going to collapse, and many people will lose their jobs, and the stock markets will crash, and these huge fund managers want to save us, so they are warning us over and over and over again, get out now!!!”
In 2000, I watched my entire life savings, stuck in a 401K plummet about 50%. I knew very little about the markets and investing back then, and had entrusted an advised portion of my earnings to a huge fund management company. I had a dedicated fund manager who was also responsible for thousands, tens of thousands of other retiree wannabes. We all lost. The guy managing the fund became a millionaire. It took me nearly 7 years of staying the course, as advised, to rebuild, to get my balance back to where it was. In that timeframe, inflation slowly eroded my purchasing power, and I was no closer to being able to retire than before. I had about half the purchasing power in 2007 as I had in 2000.
And then in 2007 to 2008, it happened again! I watched our entire life savings plummet about 50%. Like the time before, and like now, I remember all of the panic and reasonings for the market crashing. It made sense, their stories. We watched our lifetimes of savings, trapped in those fund management companies, managed by millionaire fund managers just evaporate. BUT, we stayed the course. It was and has always been ill-advised to time the market, to sell out, PLUS, for almost all working class people if you try to pull out of the market, to shelter your 401K savings or invest it in things more tangible, the law or rather the IRS says you'll pay them on average 25% in “income tax”, but also an additional 10% “early withdrawal tax”. It's a bad move. So, you keep feeding the fund managers. It took us about a decade to rebuild (we did not recover, we simply kept sending them a portion of our earnings and we rebuilt our balance. “recovery” and “rebuild” are two VERY different things). Meanwhile the individuals running our funds became multi-millionaires, and those at the top of fund management companies became billionaires.
So, here we are again. This time around, fund managers are multi-millionaires many times over, some even multi-BILLIONAIRES. And we all listen and observe. The guy running one of my funds recently bought his second $10,000,000 vacation property in Naples. My lifetime of savings is down 30%. Not as bad as before, but that was preceded by about 3 years of heavy inflation, which devalued every dollar in there by about 30% as well. Down 30% on dollars that have only 70% of the purchasing power as before. THAT is bad. Real bad, and we all know it.
So here I sit old, tired, broken, and watching the whole show and reflecting on history. Different stories, similar tactics, and 100% the same outcome. The working class is significantly poorer and the uber wealthy are incomprehensibly wealthier, obscenely wealthier.
Trying to wrap my head around this thing they do. They, in charge and with their hands on all of our money, so many lifetimes of savings, are widely, wildly, feverishly telling every outlet, every paper, every channel, every forum, every reporter that they can, that we all should expect the markets and the entire economy to be in much worse shape for quite a while. It begs the question. Why? Do they want everyone to pull lifetimes of savings out of the markets, out of 401Ks, out of banks, and hunker down? Do they want us to invest even harder or send them even more money to invest for us, to manage for us? What are we supposed to do with this prophetic information, what actions should we take? I mean, if I act now on what they seem to be saying, cash out, save what little I have left, then I have a 100% gaurantee that 30 of my money is just gone. Of those dollars, they have been devalued by inflation by 30%, and for those of who haven't reached government approved retirement age, they would even pay a penalty of about 35% on withdrawals. Who comes out ahead in this mess? What are they trying to accomplish?
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