Posted on 01/22/2010 10:30:35 AM PST by blam
Doug Casey Says Bet Against Wall Street, Bonds, And After A Few Months The U.S. Dollar
Stock-Markets / Financial Markets 2010
Jan 22, 2010 - 05:45 AM
By: Casey Research
L: Doug, I saw a Wall Street Journal headline a few days ago that boldly proclaimed, "Car Makers May Hire Soon." Be still, my trembling heart! It’s hard to believe the WSJ would stoop to such a meaningless headline, but I guess they are just trying to give their desperate customers what they want: some hope, whether valid or not. What do you make of the unemployment situation?
Doug: Well, they say that during the depression of the 1930s, unemployment went as high as 25%. That’s interesting, in that at the time, half the people in the country were still farmers. They knew how to make the things they used in daily life with their own hands, and how to grow their own food. There was less specialization in the economy, and people were more self-sufficient. That made them better able to cope with an economic depression.
So it seems to me that that depression wasn’t anywhere near as bad as this one is going to be. It was caused by the inflation of the currency in the 1920s, by the Federal Reserve, and was prolonged by the actions that Hoover took, which were in exactly the same vein as those Roosevelt took later. Hoover was quite a dirigiste – I mean, Roosevelt applauded all the things Hoover did, but Hoover didn’t have the panache and good PR that Roosevelt did. But everything these two did – and both were disasters, lengthening and deepening the depression – was trivial by comparison to what’s being done today.
The government today is making things far worse than in the 1920s and 1930s. Everything the government is doing is not just the wrong thing; it’s exactly the opposite of the right thing. But more importantly, as far as unemployment is concerned, this inflationary boom has gone on much longer than that of the ’20s. Not only does that call for a bigger correction, but unsustainable patterns of production and consumption have become far more ingrained.
L: Consuming more than you produce is not sustainable, but people can tighten their belts…
Doug: That’s only part of it. If people lose their jobs today… Well, they are pretty far from the land, and I’m not sure people today think about that. Back in the ’20s and ’30s, if your car broke down, it was expected that you would get out and, under a shady tree, fix it yourself. And you could – you could even take the engine apart and fix a bearing. That’s not in the least practical today. You’ve got to have the money to pay a specialist to fix your car today.
Back then lots of people who weren’t even farmers had vegetable gardens and chickens in their yards. Today, people live in suburbs – chickens and goats are out of the question.
[snip]
Hmmm. This is just a wee bit scary..
He makes some excellent points, I’m into gold and silver also stocking up on supplies, etc.
I am a person who is stocking up and this article still made me sick to my stomach. I don’t want to think of hopeless, but I am starting to feel hopeless.
All you can do is try to be ready.
I'm about as ready as I'm going to be.
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