Now and then//1929, 2009//the coming Depression. Part I

By , August 13, 2009 7:55 pm

Now and then//1929, 2009//the coming Depression. Part I  I’ve posted twice on my belief that this recession we are going through is the prelude to a great depression unlike anything we’ve seen in 200 hundred years. I would love to be wrong, but, don’t believe I am. Listening today to a Democratic Representative give his spin and liberal talking points in support of what this Administration is doing for the economy had me crying and asking myself;  why can’t these politicians see things as they really are and not as they want them to be? And it’s not just the Liberals, the Administration, and the left wing pundits who would support anything this President wants;  it is also some of the nation’s most trusted names in the financial news reporting and analysis.  Business CEOs are somewhat upbeat and Wall Street is thinking positive for the months/years ahead. Here is what that Democratic Representative said today on Fox Business with Cavuto: “Everything is looking good, all indicators are that the stimulus is working very well, unemployment is moving in the right direction, President Obama is doing the right thing for the economy and when we spent the remainder 90% of the stimulus the economy will start moving upwards only”. The daily reports on Wall Street numbers and movement of the Stock Market over the last few weeks have been extremely positive and some are saying that the dips will be lower than the increases. Some businesses have reported a favorable increase in revenue in relation to expectations; and the various agencies reporting for the White House have provided numbers which they claim are better than expected. Unemployment numbers this month were not as bad as had been expected. The operative words here are “better than expected”.  Hello, let’s read between the lines of spin and deceit. Some claim that the current recession started last September, some claim that it bottomed last September. For sure we have not yet seen the bottom of this recession; we will not bottom out until the fall of “commercial real estate”, an increase of foreclosures and the failure of more banks. The Sad thing here is that because of our unprecedented National Deficit (the national budget has tripled under Obama) the bottom of this recession will lead to a Great Depression preceded by inflation, hyper-inflation and deflation. Read my previous posts on where I put unemployment at by next fall. Deflation will cut our national GDP. Between 1929 and 1932 the GDP went from 103 Billion to 55 Billion, an almost 50% decline. Unemployment in 1929 was 3.2%,  in 1932 it was 23.6%.  As during the roaring twenties it all started with increased real estate prices, a craze in real estate buying, foreclosures, bank failures and the unemployment that followed. “Interest only loans were very popular during the twenties. They disappeared during the great depression, only to reappear in the last five years or so. The foreclosures today are at the highest level that they have ever been in the history of this country, and growing every day”. This was written in September 2005.All the news I’ve been hearing for the last few weeks has been very positive: Following are some upbeat and positive news just prior and following “Black Tuesday 29 October 1929”  September 1929: Secretary of the Treasury: there is no cause to worry, the high tide of prosperity will continue October 14 1929: Officials of the commerce department deny rumors that a severe depression in business and industrial activity is impending. October 29 1929: Stock Market Crash I will continue this writing in a few days; it will consist of three parts.

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