Core Viewpoint - The article draws parallels between the current economic situation and historical events from 40 years ago, particularly focusing on the potential for a repeat of the "Black Monday" stock market crash due to the depreciation of the US dollar and changes in Federal Reserve leadership [2][6]. Group 1: Historical Context - The US dollar has depreciated nearly 10% this year, reaching a three-year low against major currencies, coinciding with Trump's return to the White House [2]. - Following the 1985 Plaza Accord, the US experienced a similar scenario where the dollar fell sharply while the stock market surged, with the S&P and Nasdaq reaching new highs [5]. - After the Plaza Accord, the dollar fell 36.5% against the yen and 30.8% to 36.6% against other major European currencies over 17 months, yet the US stock market continued to rise [5][10]. Group 2: Market Dynamics - The article highlights that despite the dollar's decline, US import prices did not significantly rise due to exporters, including Japan, compressing profit margins to maintain market share [10]. - The decline in oil prices further alleviated inflationary pressures, allowing the Dow Jones Industrial Average to reach historical highs during this period [10]. Group 3: Federal Reserve Leadership - The confidence in the market during the 1985-1987 period was largely attributed to the credibility of then-Fed Chairman Paul Volcker, who had successfully controlled inflation previously [12]. - The transition to Alan Greenspan in 1987 saw a lack of decisive action when the dollar fell below critical levels, leading to a loss of market confidence and contributing to the "Black Monday" crash [15]. Group 4: Implications for Today - The article suggests that if Volcker had remained in charge during the critical moments of 1987, he would likely have taken measures to stabilize the dollar and prevent the ensuing market turmoil [17]. - The analysis emphasizes the importance of the central bank's leadership and credibility in maintaining market stability, particularly in times of economic uncertainty [17].