There is an unsettling feeling creeping over the land…

And very obviously the fear of something big approaching is not confined to those on the fringes, because mainstream investors are now losing confidence on an almost unprecedented level.

Right now it is big news that the stock market just took one of its biggest tumbles in recent history, while oil prices plummeted back down to historical lows, touching below $40 per barrel. CNBC reports:

The Dow Jones industrial average fell more than 400 points as nearly all blue chips declined. In the last five years, the index has only had four instances with closing losses of more than 400 points.

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Oil reversed Thursday’s late gains to briefly fall below $40 a barrel to $39.86 for the first time since March 2009.

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“Right now there is a feeling of fear in the marketplace and all news is interpreted negatively and it’s interpreted indiscriminately,” said Tom Digenan, head of U.S. equities as UBS Global Asset Management.

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“I think uncertainty about China (and) general negativity is weighing on the market. There’s a lack of positive economic news to motivate buyers,” said David Kelly, chief global strategist at JPMorgan Funds.

For a while now, numerous economists have been warning that the system is headed for a collapse, but that message has been tuned out of the mainstream feed.

But not anymore.

China’s economic troubles, now dragging down its manufacturing sector, carry a major risk of spilling over into western markets, and the Federal Reserve has all but admitted that it is has run out of ammo to artificially prop up the U.S. market. QE3 has failed, and the negative effects of a zero interest rate are reaching a tipping point. Meanwhile, the currency wars are heating up across the globe.

Are things headed over a cliff?

USA Today expounded upon the significance of the lowest oil price in more than 6 years, as overproduction is forcing oil and drilling businesses go belly up, in turn threatening to liquidate millions of jobs and undermine the market:

Oil prices dipped below $40 a barrel Friday for the first time in 6 ½ years on the prospect of falling global demand, busting through a key threshold that could signal further declines and market turmoil… some analysts say the drop below $40 likely portends an additional slide into the $30s and continued weakness in the short term.

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Further pushing down prices was a government report that U.S. oil inventories unexpectedly rose last week.

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“It’s a very important psychological level,“ says Phil Flynn, senior energy analyst with the Price Futures Group.  “It really signals that the global economy is in trouble.”

There is surely more to come in this unfortunate drama… but already, today’s numbers are showing that a very real fear has set in about how bad things have become, and how quickly it could all come unglued.

Batten down the hatches, and get ready, for it could get ugly.

Read more:

“The Market is Uniquely Crash-Prone”: Experts Fear Financial Collapse Imminent

Economists Brace for September: “Building Up to Catastrophe of Historic Proportions”

The Market Detonation You’re Ignoring: “The Chinese Market Is In An All-On Crash”