Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I graduated from college in the early 1980s, and remember the economy was just terrible. The unemployment rate was close to 15% in my community (10% Nationally) and inflation was in the double digits. Businesses were closing everywhere and lines for job fairs and factory jobs were endless. Our budget deficit was close to historical highs and adjusted to the GNP even higher than today. Mortgage rates were close to 14%.
Back then we chose debt (Reagonomics, and the beginning of the Corporate Looting of Assets and Pensions) as the path out.
But this time around . . . . Debt is about maxed out. No Pensions or Assets left to loot.
So I would say it does not (yet) feel as bad as then -- but the downside potential at this point is much worse than the downside potential back then. And all indicators are pointing towards the downside.
Have you tracked what is going on in Iceland, when the capacity for (more) debt is done?
At a conference yesterday in London, a Merrill Lynch executive said that he expects the better comparison will be with 1929 and the depression rather than with 1990-1991, 1986 or the early 1980s.
I agree with Philip T that the potential for such a downfall is real: the 1929 depression also came on the heels of a wave of globalization that crashed in the midst of greed, followed by bad policy decisions.
Flooding the financial system with liquidity may be one part of it, but the other part is restructuring the economy, also meaning people's habits.
Yes they are much worse. For one thing 30 years ago the country still had a fairly large manufacturing base, we actually produced things that were sold overseas. Today we are a service based economy where little new wealth is created. In the 80's we had much lower debt levels as citizens and as a country. We were not involved in a war that is now increasing or debt at staggering levels. And finally the government was not spending TRILLIONS of dollars trying to solve the problems. Make no mistake, we are in serious trouble this time, from what I am seeing worse than the 30s, unfortunately few will believe that until it is too late.
Yes they are much worse. For one thing 30 years ago the country still had a fairly large manufacturing base, we actually produced things that were sold overseas. Today we are a service based economy where little new wealth is created. In the 80's we had much lower debt levels as citizens and as a country. We were not involved in a war that is now increasing or debt at staggering levels. And finally the government was not spending TRILLIONS of dollars trying to solve the problems. Make no mistake, we are in serious trouble this time, from what I am seeing worse than the 30s, unfortunately few will believe that until it is too late.
What I'd like to know is what are those of us who saved to do to protect our cash in the banks?
Location: where you sip the tea of the breasts of the spinsters of Utica
8,297 posts, read 14,157,672 times
Reputation: 8105
Quote:
The unemployment rate was close to 15% in my community (10% Nationally) and inflation was in the double digits.
In addition to what's been said above, unemployment and inflation were calculated differently back then. Using the old methodology, uemployment right now is a bit under 16% .... and I'll bet it will get much worse.
If you look at the stats ;things now probaly will get to 80's figures. But I don't see a 70's recession at all. We don't have the double digit inflation or as high national unemployment rate. Some areas it is as bad as the 70's but in others its is not close to the 80's even. Many of the worse hit areas have been slowing for decades. The worse hit areas are concentrated in the manufacturing area that have been dying for along time. Its liie Houstoin after the 70's recession'it had to rebuild its base from oil to refining and diversify.It took from the 70's until 2003 for refinbi9ng to be profitable and the work force was cut in half very quickly i that industry.
What I'd like to know is what are those of us who saved to do to protect our cash in the banks?
Being in cash right now is best, but keep a close eye on inflation. At some point inflation will begin to ratchet up and when it does it will be very bad. At that time it will be time to get out of the dollar as its value will drop significantly. Some alternatives will be gold, the yen, paid for income producing real estate, and some select stocks. Keep an eye on what is happening with China's 600 billion dollar stimulus plan, if it involves the selling of US treasuries it will be very bad for the dollar.
[SIZE=3] [/SIZE]
Being in cash right now is best, but keep a close eye on inflation. At some point inflation will begin to ratchet up and when it does it will be very bad. At that time it will be time to get out of the dollar as its value will drop significantly. Some alternatives will be gold, the yen, paid for income producing real estate, and some select stocks. Keep an eye on what is happening with China's 600 billion dollar stimulus plan, if it involves the selling of US treasuries it will be very bad for the dollar.
[SIZE=3] [/SIZE]
Where in the United States can I purchase goods for either gold or yen? That's where I get confused.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
