Posted on 11/21/2008 9:05:29 PM PST by BenLurkin
Expect to see a recession similar to those in the 1970s and early 1980s.
What are the odds that this economic slump will deepen into a genuine depression not seen since the 1930s? In my judgment, it's not likely. Instead, I foresee a moderately severe recession.
We're all hearing more and more comparisons being drawn to the Great Depression. Yes, we're in the worst financial crisis since that era, but by no means the worst economic crisis since then -- not comparable to, say, the mid-1970s.
Former Goldman Sachs chairman John C. Whitehead got a lot of attention last week with his statement that the federal government could face a downgrading of its credit rating, aggravating the recession. The result, he said, "would be worse than the Depression." Now, "would" is a squishy word in forecasting, but the headlines screamed, "Whitehead Sees Slump Worse Than Depression."
Whitehead, a distinguished American of 86 years, was an adolescent during the 1930s, so he should remember those horrible times well. I wasn't born until after World War II, so my knowledge of the Depression comes largely from books. Here are some things I've learned:
The Great Depression was a global economic collapse of unfathomable magnitude, and today's statistics of pain would have to be multiplied manyfold to match those of the 1930s.
And the Depression was preventable -- if governments worldwide had responded earlier and smarter after the stock market crash of 1929. The lessons learned since then greatly reduce the likelihood of a reprise of that decade of hardship.
(Excerpt) Read more at finance.yahoo.com ...
I’m depressed now after November 4 happened! Oh! Wrong kind of depression. Never mind.
Yeah, well, we have the perfect storm set up with the economy plunging with a socialist heading into office. Let’s just pray it only lasts 4 years like Carter.
Gosh, I hope that is true. Unfortunately, this isn’t just a stock market crash and only isolated to the U.S. but a truly world wide recession. Different countries may opt to take actions in their own self interest, which is logical, but to the detriment of other countries and that in itself could cause another spiral of new problems.
Good news bump - I think.
Only Matt Drudge has the power to turn a recession into a depression or vice versa.
We are facing financial issues that makes the ones that created the Great Depression look like the change in a little kid’s pocket: $700 TRILLION in derivatives.
http://www.ied.info/articles/an-honest-bank-is-so-simple-you-can-run-it/hedge-funds-hedging-risk-becomes-infinite-risk
This is money that is based upon the massive leveraging of assets - by as much as a hundredfold. It dwarfs ALL the currencies held by all the treasuries of all the governments in the world. And it was largely the failure of such derivatives that precipitated the current crisis.
I would also argue that history reveals that governments tend to act either too early or too late to prevent crises, and they tend to do either too little or too much. To the effect that we NOW know how to stop a 1930s-style collapse is immaterial; we’ve moved FAR beyond that, into a system that is so complicated that no one understands it.
I would further argue that the very people you are arguing can “fix” the problem are the SAME ones who largely created the mess in the first place. I frankly have little trust in the blind to lead the blind.
I frankly think our economy is doomed.
I hope it’s true, but think it probably isn’t.
Here’s a good read from 1933. Much of the analysis is very telling-—and ominous.
Add that to a Marxist taking office and having a Rat majority in Congress, it’s not good.
http://www.freerepublic.com/focus/f-chat/2135558/posts
Obama and the Left are salivating over their prospects of advancing socialism. Nothing like a “crisis”.
Thank you; I am going to print it out and read it tomorrow.
Chuck Norris could do it without breaking a sweat.
You’re welcome.
I’d be interested in your thoughts.
Sure.
Kiplinger is making a distinction between a financial crisis and an economic crisis. They are different. A liquidity crisis, which was aggravated by a completely inappropriate response by the Federal Reserve -- it tightened instead of loosening -- is only part of the Great Depression. There was also an economic crisis because the US held the debt of too many other nations in 1929. When those nations could not pay their debts to us, a good part of the US manufacturing sector that the rest of the world depended on collapsed as well, triggering a genuine economic crisis: the fundamentals were not sound.
In the current situation, the economic dimensions of this crisis appear to mostly be in the housing sector. That has produced a financial crisis, but that financial crisis is not fundamentally an economic crisis for people outside of that sector; the general downturn (economic) may have more to do with high energy costs in the first three quarters, which are easing.
When they say it’s not about sex, it’s about sex.
When they say it’s not about a depression, it’s about a depression.
-- Rahm Emanuel, Obama's Chief of Staff
Isn't it interesting that these people would rather force their experiment upon the entire WORLD's economies than turn the capitalist system loose to restore itself and give themselves a halo for doing it? They just can't seem to get the idea that they could have a lot of glory by turning the economy around. They are simply so doctrinaire that the experiment means more to them than the glory.
"The struggle is everything..." Saul Alinsky
A Jimmy Carter malaise is coming due to 0.
Right now we are in a global economic collapse of unfathomable magnitude, and today's statistics are much, much worst than those of the 1930's. We are at the very tip of a big iceberg, and it's all downhill from here...and we are zooming down that hill at a record pace.
There going to have to rename the Great Depression the Lesser Depression compared to what's going to happen within the next year.
Check out this "statistic:"
"...The worst annual decline in the Standard & Poor's 500 Index since 1931 has dragged down every industry in the benchmark gauge and 96 percent of its stocks..." http://www.bloomberg.com/apps/news?pid=20601213&sid=am1FNznC.tNE&refer=home
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