Two reasons: no gold standard and technology
The bounce recovery in the first half of 1930 and the fall of up to 90% of the stock market over the next 2 years was slow to develop along with deflation and unemployment.
It was a different way of life back then. Now everything can be done in seconds and not days. On top of that, there was “finite” money back then based on our gold standard. Now, money can go in and out of the system extremely fast in the trillions with the stroke of a keyboard.
I think our “bull run” has ended like in 1930 already, and I believe that near the summer/fall of this year, we will be down well below 5,000 on the DOW and continuing to fall with unemployment spiking.
I believe all this just because everything THIS time is accelerated just because we live in a faster world.
Remember, the unemployment numbers are so wrong it’s not even funny. Using calculations done from the 1980s has us around 15% unemployment TODAY. A little more serious than what is at hand.
I believe the fall will be swift and hard, but the bounce back will occur in about 2 years time AFTER the remaining housing bubble chokes on itself.
When this happens, we will experience inflation that hasn’t been seen since 1776-1781 with the Continental. Too much money is simply “waiting” on the sidelines when any recovery starts to slow down the pendulum in the inflation direction IMO.
If you want to go long in the market, I think you should simply withdraw all your money and leave it in a bank like JP Morgan (one you pretty much know won’t go away) and just pay attention and be patient until the day comes to get back in right when inflation starts to rear it’s head.
I would really like to hear what anyone has to say on the matter, and please educate me if I have any thoughts off base here.
