1929 vs 2000 ..OUR ECONOMY IS MORE LEVERAGED and stock market more over valued than anytime in history.

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This is truely a fact we are in much deeper than anytime in history. Unfortunately, the fall out will be that much greater than anytime in history. More Americans are invested in stocks by 4 fold than in the 1929 high in the market. Today it's 48% vs 12%.

We all need to be aware of the danger in the economy. If we start to tumble, it's going to be quick with all the debt/leverage at all time highs.

Watch the stock market and early signs of a slow down. Then I'm afraid it's time to get out of dodge if you live in highly populated cities. Remote country living would seem to be the order of the day.

Please, I'm not saying it's the end of the world, just be aware of the facts and don't wait to make necessary changes when you see signs of trouble.

My opinion is they cannot stop whats about to happen and I am preparing accordingly. I hope I'm wrong, but I don't think so.

-- prepare (prepare@watch.be.safe), May 07, 2000

Answers

No, no, no, you've got it all wrong. Too much debt is not a problem because the government will just print more money to keep it all afloat. This just HAS to work, because it always has before, and nothing can happen in my world unless it has already happened to me before.

If you don't agree with me, then you are a paranoid, survivalist, right-wing, Christian, gun-toting, gold hoarding, racist.



Sarcasm OFF.

-- J (Y2J@home.comm), May 07, 2000.

Let's look at some facts... It is true a greater percentage of Americans own stocks today than in 1929.

It is also true the margin requirements are also significantly higher. In 1929, one could purchase equities on a 10% margin... today the margin requirement is 50%. Unlike 1929, banks and other financial institutions are not allowed to invest speculatively in the market. One of the reasons the Great Depression happened was that an unregulated banking industry was allowed to engage in wild speculation including equities, real estate and corrupt loan practices. Despite the trappings of prosperity, there was widespread poverty in the 1920s. The agricultural sector was in terrible shape. It can be argued that the U.S. government exacerbated the Great Depression by foolish policy decisions. The Federal Reserve actually tightened the money supply in the face of the downturn and Congress enacted the Smoot-Hawley tariff.

The simple existence of a speculative stock market bubble does not make this 1929. Nor is there any reason to believe economic policy makers will repeat of the mistakes of the past.

-- Ken Decker (kcdecker@worldnet.att.net), May 07, 2000.


Keep your blinders on Ken.

-- Swampthing (in@the.swamp), May 07, 2000.

*Remote country living would seem to be the order of the day.

I'm not trying to be obnoxious: this is a serious question. How is "remote country living" going to save me?

1. How am I supposed to earn a living if the economy doesn't totally tank?

2. How am I supposed to get into town for supplies if we have enough round of high gas prices/potential shortages?

3. Given my present skills, how am I supposed to survive "living off the land"?

4. What assurance do I have that local "have nots" aren't going to invade while I'm sleeping or busy trying to live off the land?

-- (Kb8um8@yahoo.com), May 07, 2000.


Ken,

"Despite the trappings of prosperity, there was widespread poverty in the 1920s".

Does living in a $300,000 house, driving a $35,000 car, and having a $100,000 portfolio mean that we are prosperous?

Or does the fact that we owe $30,000 on the car, $270,000 on the house, $50,000 in margin on the portfolio, and another $35,000 in credit cards mean that poverty is widespread?

-- J (Y2J@home.comm), May 07, 2000.


A recession could quickly turn into a depression with the conditions that exist today (unprecedented stock market overvaluation, record consumer debt levels, record trade deficit). Total debt is now 2.75 times GDP, and household debt approaches 100 percent of personal income, far higher than any other time in history. Even without y2k problems, we are in uncharted territory, and almost anything can happen.

-- Get (out@of.debt), May 07, 2000.

Wow! Slow down. Whoa! Wait a minute.

"Unlike 1929, banks and other fnancial institutions are not allowed to invest speculatively in the market." (-Ken Decker)

With U.S. banks alone holding $35 TRILLION of the world's $85 TRILLION in derivatives, how can you say that? We have just recently seen what this type "investment" can do: the collapse of the mighty Tiger Management Hedge Fund, with the sacrifice of $22 billion of its investors' money in just 18 months, and the sharp, 20% loss of invested capital by George Soros' operation since the first of the year.

I call that kind of derivatives exposure by banks WILD speculation.

-- Wellesley (wellesley@freeport.net), May 07, 2000.


un-like most here,i,m not a college grad. but i,ve never known a PARTY that didn,t END sooner or later.hang onto those sardines amigos.

-- al-d (dogs@zianet.com), May 07, 2000.

It's also worth keeping in mind that the Glass-Steagall Act (of 1933) was recently repealed. Not exactly a good sign.

http://www.dismal.com/top25/t25_GlassSteagall.stm

http://hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=001eUF

-- Those who don't learn from history are doomed (to@repeat.it), May 07, 2000.


I liked the comment about the $300,000 house and so forth. To me, who is not real 'up' on stock stuff, it just seems that peeps are living WELL above their means.

Back to the simple life...Do We:

1. Need the 300,000 house?

2. The 35,000 Lexus?

3. The 500 pooch (btw my bro in law lost the damn pooch!)

Furthermore I agree, country living, I cant even grow a dandylion.

how the heck am i supposed to live the country life...all I know about that is how to make hillbilly gravy.

I do have debt, am not against debt, although I know, there are many things I dont 'have to' have.

however, in the event of a crash/bad economy, will I be able to make ends meet?

You are darn right I will, been there done that. Yes I enjoy the good life, but Al, you are correct, I've said it for years...

What goes up MUST come down...eventually....do i want it to happen? No

But I WILL NOT be scared into 'preps' again, ever, learned that lesson, I now live one day at a time.

Best way/only way to live...

-- consumer (shh@aol.com), May 07, 2000.



I just read a headline on the Cover of May PC Computing that said "Profits Are for Sissies". Yeah, right....

The dot.com bubble is leaking, and will surely burst when those gampling on most of these companies realize there are no pots of gold at the end of most of those rainbows. But all in all, I think the market is big enough to handle that, what do you think? I would expect a shift back to "real" companies with viable businesses and ...profitability.

-- FactFinder (FactFinder@bzn.com), May 07, 2000.


Consumer,

NO, NO, NO! Not being fooled again doesn't mean you have to give up your preps. What will you do in the event of a prolonged blackout, earthquake, flood, etc.?

A week's worth of independence is ALWAYS a good thing to have around.

And you can STILL live one day at a time, but with a few basic & cheap supplies around that will also include the bad days.

Trying to look out for what I believe is in "your best interest", so please don't get offended,

Frank

-- Someone (ChimingIn@twocents.cam), May 08, 2000.


Frank"

No offense taken...TRUST me, I do have 'enough' to do me at least a week, at LEAST...have the camp stove, w/ propane crap, although I never camped a day in my life, have lanterns, candles., ALOT of prep stuff still laying around althogh I tried to give most of it away.

I hung onto bottled water, PLENTY of that..

You know, when you go hungry at certain times in your life, when you DO have, you always buy more. I am VERY compulsive about about food.

I appreciated your concern. I just dont care much for the fear mongering. Very resentful that i got sucked into y2k by my own lack of real knowledge and NOT believing the professionals. *sigh*

Thanks again.

-- consumer (shh@aol.com), May 08, 2000.


Consumer,

Do fire up that camp stove and cook a couple of meals on it -- haul it out to one of your fine state parks up there if that'll make the experience more pleasant.

I'm definitely not into "fear mongering," but there was a fairly nasty windstorm up your way last year -- it blew through Sandusky and took out about 500 transformers between Northern Ohio and Southeastern Michigan (Monroe!) Remember?

While I like to think of myself as the knight in shinning armor who's going to go around around and light ladies' stoves for them, the truth is that I and my little chain saw will probably be out clearing roads if we get anymore major wind storms.

-- (kb8um8@yahoo.com), May 08, 2000.


At present, we are replaying 1994, not 1929. In 1994, the Fed had to raise rates after having pumped money into the system in response to the S&L crisis. Rates were bumped 6 times in total, including two big bumps of 50 bp, accompanied by much wringing of hands in the press. Eventually, this action cooled things down enough to keep inflation at bay (the proverbial "soft landing".)

That looks like what's being played out now. Anyone who thinks that the Fed isn't dead serious about fighting inflation hasn't been paying attention for the past 6 years, and Dr. Greenspan has demonstrated that he will raise rates until the indicators tell him to stop.

-- DeeEmBee (macbeth1@pacbell.net), May 08, 2000.



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