Economist Who Called 1987 Crash Warns Markets Face Growing Risk

Mark Skousen, the economist who foresaw the 1987 market collapse, believes the current financial environment is entering a precarious phase.

In a recent interview with David Lin, he warned that structural weaknesses and rising uncertainty could soon test global markets.

Rather than an isolated shock like ‘Black Monday,’ Skousen sees today’s risks as systemic and slow-building. He points to shaky economic policies, deteriorating investor confidence, and a weakening dollar as early signs of deeper instability. Although past Federal Reserve actions, such as the aggressive liquidity boost in 2020, helped avoid short-term damage, they’ve also fueled longer-term inflation pressures.

Skousen voiced concern over the gap between rising Treasury yields and a falling dollar—a disconnect he interprets as declining faith in U.S. financial leadership. He partly attributes this to ongoing trade wars and political dysfunction, arguing that uncertainty over U.S. policy is pushing investors toward safer assets like gold.

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The economist also flagged overreliance on leverage and fractional reserves as serious vulnerabilities. A single institutional failure, he warned, could trigger a wider crisis.

Recession fears persist despite progress in U.S.-China trade talks. While JPMorgan has lowered its 2025 recession odds, others remain bearish. Economist Steve Hanke, for example, continues to forecast a 90% chance of a downturn, citing long-lasting effects from past trade policies.

Skousen’s bottom line: markets are more fragile than they appear, and the wrong policy move could be enough to spark the next major disruption.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.