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The Great Depression vs. The Great Recession

The Great Depression taught savings- the Great Recession teaches speculation

20:00- 21:50 discussion how the stock market continues to rise on any news, good news, no news or bad news. The stock market is viewed as a barometer for the health of the economy. The current stock market is based on speculation. During the Great Depression, people learned thrift and savings. During the current Great Recession, people borrow and speculate.


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Enjoying your posts Smaulgld

Thanks and keep them coming.

"One resists the invasion of armies; one does not resist the invasion of ideas" Victor Hugo

Thanks Colorado Sean

enjoy your comments. Keep em coming!

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Question

What is the difference between a Depression and Recession?

I think they invented the term recession

after the Great depression to take some of the psychological sting out of the term depression.
A recession is generally defined as 2 QTRs of a decline in QDP. But when does a recession turn into a depression?

Economics refused to use the term during the 2008-09 down turn

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Psychologically it seems that 'Recession' implies resolution-in-sight, while 'Depression' suggests none; if referring to the contemporary state of things and despite some official assurance, economically it seems like we're (US) actually in the latter

Correction: The great

Correction: The great recession taught dependancy.

The great depression started the ball rolling in that direction

However, a much smaller pct was on govt aid- those that didnt get it werent borrowing
Money and buying houses and cars and stuff at walmart and investing in speculative stocks

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Social Security came out

Social Security came out then, 1935.

Tipping Point - Johnson Administration

He reversed the policies of JFK and then added guns and butter to the national debt ledger. My proof - Nixon was backed into a corner and had to de-link from gold. Been downhill ever since... or uphill if you track the money supply and inflation (currency erosion).

"One resists the invasion of armies; one does not resist the invasion of ideas" Victor Hugo

Johnson forced Nixon's hand as did

foreign central bank gold redemption requests
August 15 1971 was the day Ron Paul decided to enter politics
http://smaulgld.com/why-saudi-arabia-matters-in-helping-to-k...

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Savings are "Quaint"

It seems quaint but there used to be a time when we did not buy until we saved enough money to make a purchase. Today savings are punished as being quaint.

"One resists the invasion of armies; one does not resist the invasion of ideas" Victor Hugo

Savings are the enemy of a centrally planned economy

it takes money out of the planners hands- that is why they love negative interest rates-it put all the money in circulation for them to allocate

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I think it was the Greatest

I think it was the Greatest Generation was the last generation that saved. Everyone afterwards were spenders. Remember there were no credit cards or government services(very little) back then.

Savings are discouraged

borrowing encouraged to buy homes- rising home prices are considered good.
Borrowing for "education" and cars is also encouraged. People don't work their way through college or pay cash for cars any more

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80's

I remember that I had to fill the cookie jar before I could buy the Louisville Slugger I wanted so bad... I earned the money by starting a lawn service business when I was 13. My Dad had to co-sign so I could have a bank account. I could not get a checking account, I was too young.

When I was 16 I was finally old enough and I needed a checkbook. My dad had to co-sign. I bought my first (used) car cash, no one would give me a loan.

Then something changed... in the the late eighties credit card companies were sending me Visas and Master Cards. They said I was pre-qualified but I did not have a real job, I was scratching my way through state college. Need an account and you want a checkbook with that? no prob. Need a car loan? No prob. Want a store credit card? Here ya go...

I believe, from my own experience, that the late 80's were the inflection point for loose credit and sub-prime lending habits. After all, it was the decade of the junk bond...

"One resists the invasion of armies; one does not resist the invasion of ideas" Victor Hugo

Doing an article now on savings and gold

Countries and individuals that produce are interested in savings and gold

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From then on

people came of age thinking a credit card made you rich

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