Thread: This is Like the Great Depression and Worse

This is Like the Great Depression and Worse

Economics / Great Depression II Jan 29, 2010 - 12:40 PM
By: Mac_Slavo

Wellington Letter publisher Bert Dohmen discusses the economy, stock markets, gold, China’s Dubai-style bubble, and forecasts for 2010 and beyond with the McAlvany Weekly Commentary.

(Interview available below excerpts and comments)

Dohmen on the US dollar, stocks, commodities and the possibility of gold finally decoupling from equities and other commodities:

“The dollar is going to be the big story this year, in my opinion. At the end of November we got bullish on the dollar and we said that’s going to be the big surprise from now on - a rising dollar. And a rising dollar really confirms our view on the stock market. As you know, in 2008 the US stock market had a major crash and at the same time the US dollar had a major rally. So, if the same correlation still works and there are good reasons for that correlation - and the same correlations exist in my view - then a declining stock market should be accompanied by a rising dollar.

Then you have to say, what other repercussions? In the January 5th Wellington Letter we said the dollar will rally, the stock market will decline and with the dollar rally all commodities, all of the hot markets of last year will tumble. That means emerging market stocks, emerging market bonds, commodities.

The big question mark is really gold and I would say there is maybe a 30% chance that the precious metals will be able to kind of resist the plunge in the commodity prices, or the decline will be less than other commodities.â€

Without job creation and bringing unemployment down, there will be no more economy as we know it. There will be no more taxpayers to subsidize all the social programs or pay interest on our debt (majority ownership with the Chinese). Without jobs we cannot continue to buy cheap Chinese products to keep them happy. They will lose as well.
Credit growth got us into this mess in the first place, with banks lending $30-40 for every dollar of deposits. Credit can only come after some stability is realized.

“If you add those people back in there, people who haven’t worked in a year or more, then you get over 22% unemployment right now. I think we’re already pretty close to what we saw in the great depression.

you can believe the 10% unemployment Obama and the Democrat's sling at you if you wish America .. the real unemployment number (U-6) is the barometer at where this country stands

almost 4 out of 10 people are unemployed and that number is going to get a lot worse. Go ahead and not say a word when they give amnesty to any number between 26 - 40 million Illegal Aliens and try finding a job then

do you really believe there are only 12 Million Illegal Aliens in this country .. do you believe your government in any thing they tell you any more. Why do you think the White House took over the Census.. they need to hide the actual numbers until Amnesty is passed ... then you will be Shocked at the amount of Illegal Aliens in this country

you either stop it or pay the cost.. not just for you but your children, grand children, brothers, sisters, Aunt's, Uncles

you need to take a stand and it better be a firm one

Originally Posted by vortex

Without job creation and bringing unemployment down, there will be no more economy as we know it. There will be no more taxpayers to subsidize all the social programs or pay interest on our debt (majority ownership with the Chinese). Without jobs we cannot continue to buy cheap Chinese products to keep them happy. They will lose as well.
Credit growth got us into this mess in the first place, with banks lending $30-40 for every dollar of deposits. Credit can only come after some stability is realized.

That is so true, vortex. There will be no recovery ever under the present policies because they are in fact the root causes of this disaster. There is a lot of focus on the dollar and on the Federal Reserve, which is okay, but the root cause of the failure of the dollar is the number of dollars that have exited the US in free trade treason payments purchasing imports from countries who don't buy our products in return at the same volumes, and the Federal Reserve System needs to be repealed but that really isn't the root cause of this depression. The root cause of this depression is more people than jobs which is the result of illegal immigration and free trade treason exacerbated by a tax system that robs the economy of those monies before they've had the chance to multiply through a full production cycle.