December was the worst month for stocks in three decades. With the government still shut down, the trade war still hot, and the Fed expected to hike rates again, a stock market crash in January 2019 is a serious concern.
While no one can accurately predict the future, the reality is this bull market run is the longest in stock market history. While stocks have already fallen into correction territory, a sustained bear market is eventually going to happen.
Whether the bear market starts with a market crash in 2019 is impossible to know.
But what we do know is the warning signs are there.
In fact, one of the biggest concerns is one most investors hardly hear about...
How Debt Could Start a Stock Market Crash in January 2019
The entire planet is facing a debt crisis that could trigger the next stock market crash.
In the past 15 years alone, global debt has increased twofold, spiking by $15 trillion over the last two years. The Institute of International Finance cautioned last July that this was the largest increase in a two-year period. In the first quarter of 2018 alone, $8 trillion was added to global debt to reach a staggering $247 trillion.
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This represents over three times the worldwide gross domestic product, or 318% specifically. This is the equivalent of a household that borrows triple the amount of its incoming pay. It's simply not sustainable.
On the home front, the United States reached $21.79 trillion in November, and interest on that debt is projected to grow by at least $310 billion each year.
This has transformed into a crisis, since someone is going to have to foot the bill for these mind-boggling payments. That someone will most certainly be the tax-paying public.
This is unwelcome news at best, but it gets worse.
For the fiscal year 2018, the U.S. federal government closed out the year with a $779 billion deficit. This is due in large part to the Trump tax cuts, which slashed government revenue without cutting expenditures.
This is the largest federal deficit in six years, and the expectation is that it will continue to explode.
The news out of China isn't much better. Now the world's second largest economy, it has experienced rapid growth - but at a significant cost.
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The country has printed more currency than the United States since the last financial crisis, and its yuan has become weak relative to the U.S. dollar. This is a problem because much of China's debt is based on the U.S. dollar. In fact, CNBC recently estimated that the Chinese government debt alone could be around $6 trillion.
This will be tough to repay.
The global financial outlook is not pretty either, according to the International Monetary Fund's (IMF) latest World Economic Outlook report. In the wake of the 2008 financial crisis, many countries drastically cut interest rates and began printing money to stimulate their economies. These actions mean that there are limited resources on hand to address the next economic crisis.
We can find evidence of investor fear rising in the bond markets.
The 10-year Treasury benchmark rate hit 3.06% in September, jumping from 2.06% in little more than a year, a 14-month increase of 50% in this key figure.
As interest rates continue to go up, the value of bonds and notes will fall. According to the Bloomberg Barclays Multiverse Index, $1 trillion in bond values were wiped out over just a three-week period from September to October of 2018.
While we aren't predicting a stock market crash in 2019, there are enough signs of trouble that investors need to have a plan of what they'll do.
Not only can you avoid some tragic losses with the right plays during a stock market crash, but you can also earn some serious profits in a bear market.
How to Survive and Make Money During the Next Major Economic Crisis
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The good news is that you can still make money when others are counting their losses. For example, when the losses are piling up for bondholders, the ones who are raking in the profits are those who sold bonds short.
Not everyone is comfortable with short selling, but you can accomplish roughly the same result without the risk of taking out a short contract. Exchange-traded notes (ETNs) make this possible.
According to Money Morning Resource Specialist Peter Krauth, an ETN that goes up as bond prices go down allows investors to take advantage of the panic tied to rising interest rates.
This is still a speculative play, however, so Krauth recommends that investors make this a small part of an overall investment strategy.
To make money from tumbling bond prices, the best ETN according to Krauth is the iPath U.S. Treasury 10-year Bear ETN (NASDAQ: DTYS). This is an investment that moves inversely with the price of the 10-year Treasury.
Since interest rates are likely going to continue to increase and the global debt bomb is at risk of exploding, the future for bond values doesn't look bright. This will prove profitable for owners of this ETN, though.
This could be an excellent hedge when the next financial crisis materializes.
But we have an even more comprehensive plan for surviving - and profiting - from the next market crisis...
How to Safely Guide Your Money Through the Worst of This Market Disaster
Did you know some of the world's biggest fortunes have been built during some of the most appalling market conditions?
It sounds contradictory...
But all you need are the right tools - and the uncensored truth the mainstream media doesn't want you to know.
See, the incompetent and corrupt people who run some of America's largest financial institutions are only a few weeks away from bringing the U.S. economy crumbling down.
And they don't want you to know the truth until it's too late.
But by arming yourself with the right knowledge today, not only will you and your money be shielded from this market storm - you could also start seeing explosive profits.
And if you make the right moves now, you could make more money in less time than you ever thought possible.
But you don't have much time left to take action.
And once this wave of destruction hits, you'll wish you had seen the signs while there was still time to do something about it.