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 weakening of the US dollar and changes in Federal Reserve leadership [2][5][10]. Group 1: Economic 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]. - The S&P 500 and Nasdaq have reached new historical highs, driven by expectations of monetary easing and improved trade relations [4]. Group 2: Historical Comparison - The "Plaza Accord" of 1985 led to a significant depreciation of the dollar while the US stock market experienced a period of unusual prosperity, with the dollar falling 36.5% against the yen and 30.8% to 36.6% against other major currencies over 17 months [5][7]. - Despite the dollar's decline, US import prices did not rise significantly due to exporters, including Japan, compressing profit margins to maintain market share [7]. Group 3: Market Confidence and Leadership - Market confidence during the 1985 period was heavily reliant on the credibility of then-Fed Chairman Paul Volcker, who had successfully controlled inflation previously [8][12]. - The transition to Alan Greenspan as Fed Chairman 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 [10][11]. Group 4: Implications for Current Market - The article suggests that if Volcker had remained in charge, he would likely have taken action to stabilize the dollar, potentially preventing the market crash [11][12]. - The personal reputation of the Fed Chairman and the market's trust in their commitment to anti-inflation policies are critical in maintaining market stability [12].

Core Viewpoint - The article draws parallels between the current economic situation in the U.S. and historical events from 40 years ago, particularly focusing on the potential for a repeat of the "Black Monday" stock market crash due to factors such as a weakening dollar and changes in Federal Reserve leadership [1][2]. Group 1: Economic Context - The U.S. dollar has depreciated nearly 10% this year, reaching a three-year low against major currencies, coinciding with Trump's return to the White House [1]. - The S&P 500 and Nasdaq have reached multiple all-time highs, driven by expectations of monetary easing and improved trade relations [2]. Group 2: Historical Comparison - The article references the "Plaza Accord" of 1985, which led to a significant decline in the dollar and a simultaneous rise in U.S. stock markets, with the dollar falling 36.5% against the yen and 30.8% to 36.6% against other major currencies over 17 months [2][4]. - Despite the dollar's decline, U.S. import prices did not significantly rise, aided by falling global oil prices, which helped maintain low inflation [4]. Group 3: Federal Reserve Leadership Impact - The market's confidence during the "Plaza Accord" era was largely attributed to then-Fed Chairman Paul Volcker's reputation for controlling inflation, which reassured investors [5]. - The transition to Alan Greenspan as Fed Chairman in 1987 marked a shift, as he failed to respond to critical market signals, leading to a loss of confidence and ultimately contributing to the "Black Monday" crash [6]. Group 4: Hypothetical Scenarios - The article posits that if Volcker had remained in charge, he likely would have acted to stabilize the dollar and control inflation, potentially preventing the market crash [7].