“This is the Greater Depression…and it’s going to be worse…far worse…than the Depression of the ’30s,” said Doug Casey.
“We’re just in the eye of the hurricane now. It seems calm. But the other side of the storm is going to hit soon. And it’s going to be much worse…”
Doug proceeded to list all the reasons this storm will cause more devastation than the ’30s tempest.
For one thing, people have much more debt. There was relatively little consumer debt in the ’20s. Credit cards hadn’t been invented yet. And if you wanted to buy something from a store you had to pay for it in advance. They had ‘lay-away’ plans. You could pay a little each month. Then, when you’d finished paying for it, they’d give you the merchandise. Generally, people still believed in saving money.
There was no expensive social-welfare establishment.
There were few bailouts and few boondoggles.
The US government had little debt and was relatively little-involved in the economy.
The US had a positive trade balance.
The US was still a growing, dynamic economy…and the world’s leading exporter.
And the US wasn’t involved in any foreign wars. Its military expenses were trivial compared to those of today.
People wanted to invest in the US. The US dollar was backed by gold.
“Now, smart Americans are getting their money out of the US,” said Doug. “This time it’s going to be much worse.”
Bill Bonnerfor The Daily Reckoning
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill's daily reckonings from more than a decade: 1999-2010.
This is why no one reads you anymore Bill, you went from Greatest Depression to Great Correction to Mildly Satisfying Correction to Fiscal Ringworm and now back to Greater Depression. That’s more waffles than Dennys.
Don’t listern to that knave, Bill. You are correct.
This is not a “Greater Depression” just because it will be worse, it is actually Greater.
I say that with the hopes that this will be a final reckoning for Capitalism. That the prudent man will shed the shackles of debt…through bankruptcy…through a financial “Turn on, tune in, and drop out.”
There will be no “credit” in a couple years anyway, so BK is a great option for jamming it back to the corporations who stole our money in the first place.
Those at the top of the pyramid cannot stand without the foundation. We are that foundation. They can’t grow their own food, they can’t mine their own nitrates and phosphates. They don’t know how. They probably couldn’t spell nitrates.
They need us WAY more than we need them.
When ususry and capitalism were birthed, they knew there was no end game, no exit.
Keynes knew it.
Laffer knew it.
I know it.
Now you all know it.
Close all of your positions. Buy some land with water.
Learn the “how” of the world and do it.
This is OUR exit stratgey.
Pass it on, and May Your Dow Never Jones!
0HedgeOHarry, right. The recovery is back on! The markets like what Wal Street is cookin’ and the DOW has surged forward in a big way. then tomorrow it will drop by the same amount.
0HedgeConvertedHarry – No one reads Bill anymore…except for you, evidently.
Read more carefully – the entire thing is a quote from Doug Casey, not Bill.
Let’s see a Bad Depression I am guessing means that people will be able to consume a lot less goods and services.
And it means that a lot less goods and services will be produced.
That is the part that baffles me, if the Earth is capable of producing its current bounty of goods and services and people and companies are motivated to produce it, exactly how do we get to the situation where the stuff no longer gets produced and consumed.
Momey and debt are sort of abstract. Goods and services are real. The earth is set up to produce all this stuff and I don’t quite get how that will stop.
I am not saying we won’t have a depression, I just don’t know how or why.
Any why should I?, people still debate how and why the last depression happened.
There proably are not 10 people in the world who really understand these things. Bill may be one of them. Bill’s readers are not one of them.
There are organizations that are making the rounds right now, (top shelf lawyers and planners from NY, Zurich, Austria) pitching plans for rich Americans to give up your US citizenship and become foreign citizens. It’s expensive and you need to bring a sizeable amount with you. Ultimately, their pitch is “get out while you still can”
Thank you for saying this. This truth is staring us in the face and no one but the writers on this website seem to acknowledge it. What is the economic history of the recent past? It can be summed up in one sentence: Americans bought stuff, and now they’re broke.
I spent my education hearing in one way or another that the Asians were smarter than we were. That they extended us so much credit is proof that this is not the case.
One tremendous benefit to facing an economic day of reckoning will be to wipe the slate clean (of crony capitalism, socialist policies & legislation, over-extended unsustainable entitlement programs) and start anew with a refounding of the country based on the written word of the US Constitution as envisioned by our founding fathers and adhering to sound fiscal and monetary policies . . . to hell with the self-
interests of any national political party . . . it will be a fresh start . . . should ‘the people’ take ownership of their country and hold the newly-elected representatives truly accountable.
Any system with merrit works. It’s when corruption enters the system that entropy truely begins and eventually has its way with the system. It appears as though our system has been challenged to take care of everything and in doing so, or trying to do so, we have pushed the envelope far beyond its intended use. It might be said we legislated ourselves into a corner, it also might be said that while we were doing so many a %*7*78 walked off with millions. Regardless, much of what was drawn up “including our constitution” was premissed on integrity, without which our sytem doesn’t work. Intellectualism, which we bowed to several generations ago, has done us little good. Equal everything has also done us little good. Lawyers for the most part have dragged us to hell and back. Your congress person takes bribes and you just make sure you keep making your insurance payments…… or else.
It’s simple, consumers need to be able to afford the goods and services that they produce. That sucking sounds is the CEO’s taking a huge take of profits for themselves. With just a few crumbs left for workers and shareholders, consumption and reinvestment disminishes.
One of the most heated political battles raging across the western world is debt versus austerity. In the U.S. this debate reached it's apex in 2011 when the U.S. credit rating was downgraded by Standard and Poor's. In today's essay, however, Chris Mayer throws the debate out the window, explaining why he thinks a U.S. debt crisis will never happen...
Believe it or not, more capital for a company doesn't necessarily mean better returns for investors. In fact, in a recent study that dug through data from more than 200 acquisitions going back to 2006, they found a "sweet spot" for the most likely acquisition targets. And it's lower than you think. Matthew Milner explains...
The Affordable Care Act dumped 2,000 pages of regulations into the health care sector, stifling any innovation that could have brought about real cost savings. But even with these obstacles, there are still people looking for ways to do things better and at a lower cost. These new technologies could be the key to fixing health care in America...
While many of the newer social media stocks struggle for gains this year, old-school tech stocks have become some of the best trades on the market. With the rare exception (Facebook is doing well—shares are up 26% year-to-date) the social stocks are in the gutter. They got off to a fast start in January and Februray, but ran out of steam in the spring. Aside from a few feeble attempts, few have posted anything close to a noteworthy comeback. Twitter, LinkedIn, and Groupon are all down double-digits year-to-date. Groupon—the worst performer on this short list—is down 47%. On the other had, the biggest of the big tech stocks on the market are helping traders pile up even larger gains right now. Greg Guenthner explains…
In the 1960s, total credit in the U.S. broke the one trillion dollar mark...and since then, it has expanded over 50 times. But now, as Richard Duncan explains, the explosion of credit that's made America prosperous, threatens to take the entire economy down. And that could mean the return of another depression...