H.J. Huneycutt

Are We More Like 1932 - or 1923?

Great article. I find myself mostly in agreement. Everyone seems very short-sighted in regard to this current recession. It's as if most policymakers and most people in this country cannot conceptualize this being anything different than the secondcoming of the Great Depression. But if you look back at history - this is a common occurence. People often learn lessons from previous incidents and apply them wrongly to a future incident that is different in some way.

I'm so glad you brought up 1923, because this reminds me more of that period than anything else. I also think there are a few parallels to be drawn to the mid-70s recession, but 1923 is more spot-on. Of course, I don't think we'll experience Weimar-like hyperinflation. Instead, we'll get double-digit inflation and it's possible that the Feds do exactly what they did in the 1980s to stamp out high inflation. In which case, there is a lot more pain to come.


I understand the long case for gold, but I like other hard assets better right now. Gold has already had a good run-up and I think there's less of a margin for error if inflation does not hit as hard as we might like to think. Silver, palladium, and platinum look better to me because they should go up if inflation does hit, but they are also undervalued right now regardless, so even if it doesn't hit - I think they still go up. I know some people find this crazy, but I also like some of the stronger REITs out there. Prices have been battered enough so that most of the downside has been factored in for the survivors; the tricky part is figuring out who the survivors will be.