In 1929, the market crashed, and I think it will again. In 1929, there was huge unemployment, and I think there will be again. A lot is different though, so let’s examine the differences. In 1929, there was no ’off-shoring,’ and manufacturing stayed here, what there was of it. No clerical work, phone answering, and tax returns were done in India, and no Jap cars were being imported into America. China was totally backward, and had few factories. Detroit was whole, and all autos were made there. Still, 1929 and the following 12 years, until FDR got us into WW II, were pretty gruesome.
Today, American auto makers are trying to move production to China, while Japan and Germany are building plants here. Make sense? During the great depression, unemployment was 25% at its peak, and we haven’t gotten there as of yet, and I hope we don’t. I think America has been in a depression for a year now, but it has been a gradual one, thanks to the lies and propaganda spewed forth by CNBC, The Federal Reserve, and in general the corrupt electronic media. In 1929, there was stock ticker tape, no TV, no E-Mail, and radio was in its infancy. Today, with electronic trading and broadcasting, it’s far easier to fool the public into believing that everything’s OK. There were no credit cards with huge cash reserves in 1929. In 1929, it is doubtful that mortgages were as free and easy as they were up until last year, with over-appraising, and over-funding.
In 1929, the dollar was backed by gold, and none could be printed without gold backing. Gold coins everywhere, and the smaller coinage was made of 90% silver. Since FDR wanted to spend his way out of the depression, (it didn’t work), he needed gold to back the bucks he wanted to spend. He therefore told everyone to send in their gold, which many did. He then printed dollars to do all sorts of things, none of which worked, but at least the spent dollars were backed by gold. World War Two got us out of the depression. Another aside. If gold was ’confiscated,’ how come there are so many left and sold at huge prices by coin shops?
The depression we have probably been in for a year already, won’t really get some steam behind it till the DOW goes south in a really big way. Maybe down to 8,000 or lower? I urge you to sell your stocks. Today, we are already in two wars which have cost and will cost, some say, over $3 trillion un-backed paper dollars. No one attacked us to cause the wars, but we attacked them, which is different from us getting out of the depression by us being attacked…with provocation of course. FDR didn’t come close to balancing the budget, but Bush 43 is far worse. The dollars are worth a fraction of FDR’s dollars, so maybe Bush spending is no worse than FDR’s. Both 1929 and 2008 are perilous times for our economy. In 1929, endless printing of dollars was out of the question, so the problem of inflation was absent. Prices of cars and other consumer products stayed virtually the same throughout the 12 year depression period, beginning in 1929. Today, inflation is rampant and un-stoppable.
The Fed and media don’t seem to really understand what inflation is, and it’s right there in the dictionary for all to read and understand. The $3 trillion wars are pure inflation, as are the endless paying for illegals’ bills, endless bureaucracy, and pure, unadulterated waste in government. Our depression won’t stop with a world war as it diid in 1941, I hope, because we already have two wars going now, and they are very expensive. The Fed claims it only has one thing to work with, and that is adjusting the interest rate, but lowering it hasn’t changed the mortgage rates. Why should it? Would you loan for 30 years, when you know the buck is decreasing in value every day? I wouldn’t, and this is the reason it might not be wise to pay off a 30 year fixed rate mortgage. Pay it off in progressively cheaper value dollars. Pay the whole thing off with a few Krugerrands eventually?
If the Fed lowers the interest rate, it will only make our ever increasing debt harder to sell, and increasing it won’t help either, because it will indeed make domestic borrowing more difficult, and exacerbate an an already bad condition. How do we get out of this? How much worse will it get? Will inflation continue? Will we get into more wars? I know inflation will continue, because no one knows how to stop spending. The housing debacle is not over and prices will go lower. Unemployment will escalate, because India continues to take our clerical jobs, and China continues to fill containers with stuff, with the containers returning to China empty, or full of our major export…waste paper, believe it or not. The waste paper is turned into paper and sold back to us. Ugh. Business will slow ever more, because America has spent itself out of money and credit. Gasoline and millions of imports, will of course continue to go up, thereby causing more bankruptcies, divorces, and suicides. Will a few major banks fail? If it were me, I’d opt for small, individually owned, well run, non ’national’ banks. How will we get out of this one, since the Fed can print forever, thereby increasing inflation forever? How can inflation be brought under control, when we are losing two wars which cost hundreds of billions of printing press dollars a year? When a liberal becomes President, and the printing continues, plus more and more government ’benefits’ and handouts, can the buck survive? Possibly, because the whole world’s printing their currencies, and none of them are backed by anything, if that gives you some solace. Sorry, it’s all I can offer right now, but I’ll keep thinking! It might be a good idea to keep some cash on hand, (not in a bank), if bad things happen. Not much cash, as it is going down in value, but a little might be a help during a severe event of some sort, which seems almost a certainty. Protect yourself.