THE GREAT DEPRESSION? NOT.
Posted by politicalpartypooper on October 1, 2008
The “Dow” dropped 777 points on Monday. It regained almost 500 yesterday. Net loss of just over 280.
Not a bad week considering the predictions of the Mainstream Media, who from this point forward, shall also be known as the “Sky is Falling” Media on this blog.
The stock market will be the stock market, and rises and falls are all part of that. For the last year, what has been different is the volatility, often showing drops of two hundred points and gains of two hundred the next day.
If you are a hack-psychologist fan like me, you might begin to notice something. Monday’s stock drop was a panic. Tuesday’s gain was panic in reverse. For the last year, we have had mini-panics, followed by mini-euphoria’s. What does all of this tell us?
America is more and more becoming of one mind; becoming the mob. This is similar to the era of the great depression, and “Sky is Falling” media hacks everywhere would glom onto that idea, push it further than is realistic or verifiable, and make money hand over fist from the misery of others.
To separate this era from the Great depression, one thing is necessary; a recognition of the differences. I only need one major difference to dispel fears that this nation, and then the world, are about to enter a second Great Depression.
Here it is: One of the most significant markers of the Great Depression was the massive DEFLATION just prior to the collapse. We’re not just talking about housing deflation; deflation was rampant in almost every product sold.
Do we see any of that today? Besides the housing market deflating, one of the most significant markers of this recession has been much higher than average inflation without the necessary rise in average wages to accommodate it. Gasoline prices have soared, then dropped, then soared again. Unemployment is rising and consumer confidence is extremely low. We are rapidly approaching the start of our second year of negative returns. Sound familiar?
It should. For anyone older than forty, you can probably remember 1971 and 1972, the last time our stock market saw consecutive years of negative returns. Those returns were anywhere from -20% to a cumulative -50% in some sectors. Pretty scary, huh? Coupled along with that was an unpopular President Nixon, and a very unpopular war in Viet Nam.
Now how familiar does it sound?
Here’s a glimmer of hope for the Mob, and a bitch-slap to the “Sky is Falling” Media; by 1982, ten years after our last large recession, the stock market had returned everything it lost, and nearly tripled it gains from the beginning of 1971. In fact, over time, if you take ten year segments of the U.S. Stock Market, you can always find within those ten years at least one of negative returns, and a cumulative doubling of returns in the market at minimum, even including the negative years. This is amazing, it’s incredible, it’s unbelievable.
The “Sky is Falling” Media would have us believe otherwise. “This is the most serious economic crisis since the Great Depression”. We’re not just reading those words in the middle of an article anymore, or hearing them from talking heads in a conversation. Those words are front and center headlines.
“This is the most serious economic crisis since the Great Depression”
No, it’s not. It’s the most serious economic crisis since 1972. And that crisis created new regulations in gas mileage, economic reform, and a tripling of returns within ten years. Somewhere in there, Jimmy Carter was President. How amazing is that?
I remember those years. Gas lines, unemployment, even as a small child, I was introduced to the fear of job loss and hand-me-downs, because we just couldn’t afford new clothes for everyone. My Dad worked two jobs. My Mom made gourmet meals out of roast beef and carrots for a family of eight.
Yes, I remember those years well; they were the best years of my life.
And so it is with this time. Gas prices are high, unemployment is higher, and the stock market is schizophrenic. And no matter what the “Sky is Falling” Media will say, somewhere, someone is enjoying the best years of his life.