The 2nd Great Depression - History never repeats...

[Jumpshot]

The economy actually turned up in 1930 with government and business spending more then in 1929. However, the consumers were the main drag which propelled the economy into a depression.

The Great Depression did not come overnight with everyone suddenly unemployed and homeless. It came through several downsteps and, along the way, many persons attempted to predict a bottom. Each person was proven wrong.

Will history repeat?

http://en.wikipedia.org/wiki/Great_depression

Quote from the Wikipedia:


"The Great Depression was triggered by a sudden, total collapse in the stock market. The stock market turned upward in early 1930, returning to early 1929 levels by April, though still almost 30 percent below the peak of September 1929.[12] Together, government and business actually spent more in the first half of 1930 than in the corresponding period of the previous year. But consumers, many of whom had suffered severe losses in the stock market the previous year, cut back their expenditures by ten percent, and a severe drought ravaged the agricultural heartland of the USA beginning in the summer of 1930."

"In early 1930, credit was ample and available at low rates, but people were reluctant to add new debt by borrowing.["

 

[hayman]

Boy, sounds like a situation I've heard of before....

 

[Scataphagos]

Quote from Jumpshot:


The Great Depression did not come overnight with everyone suddenly unemployed and homeless. It came through several downsteps and, along the way, many persons attempted to predict a bottom. Each person was proven wrong.

Will history repeat?

Likely will be more similar than we hope.

The Great Depression was a result of the credit bubble [known as The Roaring 20s] collapse.

This time, it's a credit bubble collapse again... except MUCH bigger.

And with Chindia and Latin America's low-wage labor pool part of the mix now, we're likely to find high unemployment to be structural.

Big question is whether all of the money print, stimulus, bailout, government job creation, inflation, currency destruction effort that is going to be made this time... will it offset the contractionary forces?

 

[PragmaticIdeals]

Quote from Scataphagos:

Likely will be more similar than we hope.

The Great Depression was a result of the credit bubble [known as The Roaring 20s] collapse.

This time, it's a credit bubble collapse again... except MUCH bigger.

And with Chindia and Latin America's low-wage labor pool part of the mix now, we're likely to find high unemployment to be structural.

Big question is whether all of the money print, stimulus, bailout, government job creation, inflation, currency destruction effort that is going to be made this time... will it offset the contractionary forces?

You answered your own question.

Real, structural, economic problems and massive debt implosion

+

Monetary sleight of hand tricks and further shoving down our throats of cheap debt

=

???

 

[ByLoSellHi]

Credit bubble collapse, 70 trillion global real estate bubble collapse, markedly rising unemployment, foreclosure rates and consumer default rates definitely accelerating, banks in pitiful shape (living off the gov't), industry in pitiful shape (living off the gov't), and a consumer who has discovered that it's actually rewarding to save their money (those who have money) as credit card companies and financiers slash life lines to those in a state of permanent debt...

what f**king green shoots?

 

[hayman]

Quote from Scataphagos:
Big question is whether all of the money print, stimulus, bailout, government job creation, inflation, currency destruction effort that is going to be made this time... will it offset the contractionary forces? [/B]

Politics aside, the spending spree is akin to plugging the dike with crazy glue. It will alleviate the major problem for the short-term, but the structural problem will remain, and be exacerbated down the road.

I see the stock market stuck in this range for a bit, before we see another major dip downwards. Cash and gold is king now, IMO.

 

[Scataphagos]

Quote from hayman:

Politics aside, the spending spree is akin to plugging the dike with crazy glue. It will alleviate the major problem for the short-term, but the structural problem will remain, and be exacerbated down the road.

I see the stock market stuck in this range for a bit, before we see another major dip downwards. Cash and gold is king now, IMO.

Japan, after their initial plunge (like ours into the March low) went through 6 1/2 years of wide trading range... all the time hoping(?) their problems were fixed. Turned out they weren't and the market broke down to 25 year lows.

We could experience something similar.

 

[Martinghoul]

Quote from ByLoSellHi:

Credit bubble collapse, 70 trillion global real estate bubble collapse, markedly rising unemployment, foreclosure rates and consumer default rates definitely accelerating, banks in pitiful shape (living off the gov't), industry in pitiful shape (living off the gov't), and a consumer who has discovered that it's actually rewarding to save their money (those who have money) as credit card companies and financiers slash life lines to those in a state of permanent debt...

what f**king green shoots?

Well, the green shoots are all about the creditor nations willing to give the US consumer (through the US govt) free funding on his/her new borrowing, in a desperate bid to prevent the said consumer from stuffing too much of his/her cash under the mattress.

If the consumer goes all rational-like, ignores the government's efforts and realizes that, no matter how you slice it, you gots to pay for the party, we can all say goodbye to the green shoots.

 

[Trendytrader]

Quote from Jumpshot:



"In early 1930, credit was ample and available at low rates, but people were reluctant to add new debt by borrowing.["

Jeez that sounds like me want to buy a a new car at 0% but why pile on any more debt....only have the mortgage to worry about.


Nah just keep the current car or maybe a late model used car.....

 

[Eight]

I'm walking a lot nowadays and working to be out of debt but otoh, if I can make the mortgage payments, probably better to just take it easy and let inflation pay my debt off... the house I live in is paid for and that is a great feeling...

I feel like a hippie and a cheapskate nowadays for the first time in my life.. I don't want to spend money much at all, in fact I want to grow my own food and be debt free.. I just was reading the Rolling Stone article about Goldman and all their bubbles and I was eating some cereal with strawberries.. what a taste treat that was, I was thinking "what's better, a job at Goldman or a house paid for and this cereal? The cereal won hands down...