The View From 1776

Echoes of 1929?

Tuesday’s big drop in stock market averages and questionable financial market conditions bear an uncomfortable resemblance to the stock market crash of 1929 and the Great Depression of the 1930s.

Posted by .(JavaScript must be enabled to view this email address) on 03/01 at 02:52 AM
  1. A lot of the problem this time, is very similar to the 1929 crash when you look on a world wide basis. Much of our sell off was triggered by the financial markets in Asia.

    The yen "carry trade" involved borrowing money at 1% (.05% central bank rate) from Japan and investing it in stocks and bonds in other nations with higher interest rates and better markets. We are talking about $150 billion dollars of borrowed money and just the rise in Japanese interest rates meant a dramatic switch in the potential profits.

    Anyway, you had millions of people who thought they had found an easy way to make money without working too hard for it. Much of this sell off is being blamed on those millions of people who are scrambling to cover their loans now that the profits have disappeared. In other words, what should have been a routine sell off panicked people and triggered more selling.

    Today is up in the air. Down 200 and then with positive news down 50 and as I right this then back down to 86 below even. Gold was down, now up. We have people who don't know what they are doing still buying and selling based on emotion and it is affecting the market both up and down just as we saw in 1929 but, should this develop into another down trend for days, you could see it continue down quite aways past even where it should stabilize. People have been borrowing money from their home equity, to put in the market. Then they have been selling some each month to pay the loan payment. What will they sell if they see their investment crash?

    Some are calling for a recession not because out economy is so bad but because people are "irrationally" borrowing to create a good economy based on consumption that will end if the borrowing dries up. This borrowed "carry trade" money may be a sign that people need to pay attention to and re-evaluate how they invest ans what they are using to invest.
    Posted by JanPBurr  on  03/01  at  11:32 AM
  2. Jan-
    I have great faith in the Lord God Almighty. Next I have great faith in the market(s) and loathe government involvement except to prevent fraud, which ironically is exactly what the government does. I blogged on Social Security/Medicare and the fraud that is that disaster and MCI/WorldCom (
    I'd also recommend a superb read regarding the real causes of the Great Depression at the Mackinac Center ( The Federal Reserve set up what was the 1929 crash which was nothing more than a market correction not unlike the 1987 blow-out. The market recovered nicely after 1987 and 1929. In the post 1929 it was government meddling that forced misery and despair upon millions of Americans for decades (and in some cases the rest of their lives).
    Read the Mackinac history. And the American public still thinks that the government is the answer.
    Senator Edwards is right-there are two Americas: the ones that think and believe that government is the answer and those of us who know it's not. Unfortunately, that belief and the damages that ensue are also forced on us who wish to be free.
    Posted by Amendment X  on  03/01  at  12:31 PM

    This move and the others on this site about the Federal Reserve and our Currency support your views and should be viewed by everyone. They are professional done and about 40 minutes long for a couple of them but well worth the watching.

    The causes of the Great Depression aren't taught much because we are still using the same system and don't want to scare people to much or let them know how much power the central banks have on the economies of many nations. Here is what Rothschild said.
    "I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man that controls Britain's money supply controls the British Empire, and I control the British money supply."
    Baron Nathan Mayer de Rothschild

    Since he took the $20,000 he had to start the bank in London with, and turned it into $50 million, he did have the power he bragged of and the central bankers as a group do control many governments through monetary policy that can cause recessions and booms in economies that in turn, make politicians look good or bad as they see fit.
    Posted by JanPBurr  on  03/01  at  04:12 PM
  4. Should have added that you have to copy and paste the two lines as one, without a space at the break to get the site. Again, very good movies on the Federal reserve, our currency and the history of our currency and the Federal Reserve.
    Posted by JanPBurr  on  03/01  at  04:17 PM
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