I always find it very interesting to see the similarities between the 1929 crash and the 2000 crash. What we never see though is what happened right after. As the second video points out, Greenspan dropping interest rates to 1% fueled the RE bubble.
If you look at the 5 years after the 1932 bottom, they had a pretty spectacular bullish period
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Not unlike the 5 years after the 2002 bottom in the Nasdaq.
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And then you'll notice that 1937 to 1938 there was a drop of about 48%
The recent closing low on the Nasdaq were 1628, with the high of Oct 31, 2007 being 2859. That's about a 44% drop
So like you said...they certainly do rhyme.
And that's my point, I think we now have a year...maybe a little more, where the general market trend will be up. And then we will have another pullback that scares the shit out of everyone. I believe we are in a multiyear basing before our next big boom.
As far as the population demographics. I'd like to know a few more details. Is that actual population or are those the birth numbers for those years? If the population discrepancy is truly that great, maybe the answer is to open up those borders so that we have more future taxpaying immigrants coming over so they can fund our entitlement programs. Eventually, I think we will see a huge amnesty program for illegal aliens that will in turn make a non-taxpaying population into a taxpaying population.
I think that the next big thing to watch on the economic horizon is China. They have been going through a boom for the past few years. I have posted my views on China at various times. But here is one from May.
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The one thing that the year 2000 taught me..and I believe it 100% in my heart, is.....every boom is followed by a bust.
So how will an economic collapse in China affect the U.S.? Will it be bad? will it be good? Lots to think about there.
I absolutely don't think the next 20 years will be like the last 20 years. And yes, I expect that there will be hardship. Cleaning up the sins of irresponsible finances isn't going to be painless. And it shouldn't be. We are clearly a generation/population that needs to learn the lesson the hardway.
One thing that I liked about the Martenson piece was that he was pointing out that the recent bailout package was not only not beneficial to the individual investor, it was cruel. Watching the video on the 1929 crash when the bankers came in the week before the real market crash to save the market, made me think that the only thing that this allowed was for institutional investors to offload some more stock to individual investors and further cause pain and suffering.
Anyway, I'm pretty sure that I won't have to move the family to a freeway overpass and that we won't be digging for scraps of food out of the garbage. I'd even venture to say that my level of comfort in these trying economic times is better than the titans of industry back in 1928 at the height of their wealth. |
