The Great Depression
September 19, 2008 – 6:00 amIf you're new here, you may want to learn what this site is about. Please subscribe to my RSS feed to get latest updates on this blog. Thanks for visiting!
MY EYES were glued on Suze Orman, well-known personal finance expert and author, as she affirmed to Larry King yesterday on Larry King Live on CNN that the current crisis is comparable to the Great Depression.
Because of the US subprime crisis, the US big banks are falling, and so does everything else—stocks, yields, even the super insurer AIG, so it does seem like the sky is falling worldwide. After Bear Stearns, Lehman Brothers, and Merrill Lynch, two other banks—Morgan Stanley and Washington Mutual–are up for grabs. Just a few hours ago, news came in that central banks in other countries are pumping cash into their economies to help stabilize markets.
So, is this really the Great Depression 2.0?
The Great Depression happened in 1929 when the US stock market crashed on October 29, which has since been referred to as Black Tuesday. Crop prices fell, trade declined, businesses closed, incomes diminished, jobs became scarce, and in Gone With the Wind, Scarlett O’Hara had no choice but to face poverty. It was a devastating event for people who just experienced prosperity in the roaring ‘20s. It spread from the US to other countries and lasted into the late ‘30s when World War II began.Historians say the great imbalance of wealth and stock market speculation caused that 1929 Great Depression. The rich became so rich, while the rest of America discovered credit, and soon consumers had so much debt they couldn’t buy every new thing coming out of assembly lines. Farmers also encountered an over-supply situation in the international market, so prices fell. Then it snowballed from there.
But thanks to government reforms and assistance, the US and other countries got back on their feet. Economic slowdowns happen, but they don’t last forever.
Since then, financial reforms and restrictions have been put in place, so the government stand a greater chance of bouncing back faster from economic setbacks. A New York economist shares the same view. Mark Getler, an economist from New York University, was quoted by Wall Street Journal saying: “This has been the worst financial crisis since the Great Depression. There is no question about it. But at the same time we have the policy mechanisms in place fighting it, which is something we didn’t have during the Great Depression.”
So business goes on. Back to work, guys. My next topic will be about selecting a financial planner. So stay tune!
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2 Responses to “The Great Depression”
I was just typing that we wont get out of this until they force the short traders out of themarket as it has been announced in the Uk that the government has moved to protect a range of institutions from short traders. A move which will be welcomed and has been welcomed by the market. In 2003 the total amount invested in history in commodity index traded strategies was $13billion. In May this year it was $260billion yet everyone said speculators were not moving the market!!
see a full report here that I wrote:
http://www.wwfp.net/weekly-articles/our-weekly-columns/recession–the-uk-economy.htm
By
Peter McGahan (Who am I?) on Sep 19, 2008
I think it’s like 46 or something days until the election …
Probably the best thing “we the people” can do is VOTE for the candidate we think will help with this economic mess.
The problem for me is … I’m not really sure what the economic policies are of either candidate???
By
dawn (Who am I?) on Sep 20, 2008