Bruce Krasting

2009 Depression Will Be Nothing Like 1929

There are significant differences today and 1929. I do not see how those differences make today "safer".

The internet has brought us together. We are one world now. The US could sink into something we can not even think about because of something that happens in E. Europe or Asia. We can not stop that from reaching us any more. My guess is that in the next few months much of E Europe will fall into chaos. This will take out the already weak banks in Austria, Germany Switzerland France and Spain.

Your small world will bring this back to the US in a matter of days.

In 29 the US and the world had not have any debt to speak of. We got out of that period over a decade with deficit spending. Here is a bet for you: Sometime this year the Treasury will have a big bond auction and not enough people will come. You are a savy investor/advisor, would you recomend that someone should own the ten year t bill at 2.8%??? I am sure your answer is no. Well, the problem is we have to sell 3T of this in the next two years. If we do not all your stock bets are going to be toast.

There are 2.5 billion more people today than 1929. That is going to make this process even more difficult.

The magnitude of the capital losses from housing/other investments ('wealth effect') is already many multiples of the losses from 29 on an inflation adjusted basis.

I could go on.

We have nearly busted the system. It will take 10 years to recover from this. Stocks will go up and down. But the US stock market will look like Japan. 15 yrs of steady declines. Sorry.