For those of you who believe history DOES REPEAT, although not exactly, see www.futuresfax.com Scary parallels.

-- profit_of_doom (doom@helltopay.ca), October 17, 1999

Answers

I went to the site and read the explanation that this would unfold over several weeks given a pattern.

Our society is structured a bit differently since 1929, so if the stock market crashes to a dramatic low, what do you think could be rationally expected? If it is job layoff's, how fast after the crash does this happen? How are we "sheltered" as a nation to experience a recession but not a depression? In everything I have read everywhere everyone avoids the big "D" word. There's almost a view of, "It can't happen to Americans!"

-- Paula (chowbabe@pacbell.net), October 17, 1999.

PAULA: Rather than answer in terms of Elliott wave theory(which the ignorant de-bunk as "unscientific") let's just look at FUNDAMENTALS to see what is ahead:

1. The FED was created in 1913, yet there was a Great Depression in the 1930's. Scratch one myth that still nauseates me when I hear people say the FED won't "allow" the markets to fail.

2. The USA in the 1920's was the most SOLVENT, PROSPEROUS nation on earth.Today it is the world's greatest DEBTOR nation, with most of its factory base gutted by moving it overseas so the pigs(CEO's) could fatten their stock options. The day will soon come when these pigs will follow the path of any ordinary pig. BTW, did you know that YOUR tax money has gone DIRECTLY into actually subsidizing the factor owners to relocate their factories?. The program is OPIC, Overseas Private Investment Corporation.It was set up by the federal govmint.

3. Using high-school math, it is easy to show that ANY severe recession, let alone depression, that comes along next will cause MASSIVE systemic debt default, by governments, individuals, and corporations. Very simply, the INTEREST won't even be able to be paid on the MASSIVE debt that is out there.

3. Dr. Ravi Batra wrote in 1990 a great book called "The Great Depression OF 1990". The ONLY reason he was OFF in his time window, but will still be correct very soon, is that even he did not foresee the monstrous debt piled up in what will ultimately be a vain attempt to forestall the inevitable. Time has been bought at the cost of a WORSE depression TO COME THAN THE 1930'S ONE. 4. No amount of "technological revolution" has, in the past, prevented a depression. The 1920's were a wonder decade--the automobile became widely affordable, and so did the telephone(even though it was invented in 1876!). Radio became pervasive, and in fact was the technological marvel equivalent of today's INTERNET. Lindberg flew the Atlantic, insulin was discovered, etc, etc. SO WHY DID THE PARTY END?

5. The coming Depression will be worse than the last one (which, by the way, is the LONGEST we have had between Depressions in US history)simply due to the collapsing debt, and the fact that now most people live in cities, and so cannot hunker down on their farms with subsistence living as tens of million did during the 1930's. If you are a programmer, how will that allow you to eke out a living in a Depression?

I could go on and on, but I'll end it here. Let me know if you want more.

-- profit_of_doom (doom@helltopay.ca), October 17, 1999.

So, the nation runs the risk of going bankrupt on the debt? If so, would we still have the currency?

Would it serve a valid reason or purpose to go bankrupt on the debt? Would it serve any valid reason to radically devalue the dollar, or collapse the dollar and replace it with a new currency?

Would the USA even begin to cope with the huge influx of food stamp, welfare, and unemployment payment demands? Or is this what you mean by a systematic collapse? The whole starts to crumble? Just a total financial melt down everywhere one turns?

-- Paula (chowbabe@pacbell.net), October 17, 1999.

profit_of_doom:

More! More!

Please?

-- Randolph (dinosaur@williams-net.com), October 17, 1999.

And don't forget the newly updated S&P chart at www.mrci.com/special/DSPI87.htm

-- Randolph (dinosaur@williams-net.com), October 17, 1999.

HERE'S the MORE:

The demographics are another HUGE problem that will make things worse. Back in the 1930's, life expectancy was about 55 (it was about 48 at the turn of this century). Most old folks were taken care of by the family(their sons/daughters) on the farm/at home. So there was NO health care cost. Remember that at that time, there wasn't even penicillin as an RX drug. Now there are thousands of RX drugs, drug plans cost the US government tens of billions/year, and to that we add nursing/home care, and the fact that life expectancy is now about 81/75 F/M.

Where will any money come from to supply these services when the well is dry?

At the peak, just 2 months ago, the US stock market was capitalized at $14 TRILLION. This is all on paper. Only a few can sell at the top. The economy is so leveraged to the "wealth effect"(whereby people think that stocks can only go up, so they use their portfolio as an asset to get a bigger home mortgage, so that they can "free up" some home equity to go on a vacation, etc.; OR, they rack up half a dozen credit cards to the max, thinking that they will be able to pay it off no problem since their stocks will always return 25%/yr)that there cannot but be severe repercussions when the market falls, say, 20%, since that represents a BIG percentage of the ENTIRE US ANNUAL OUTPUT(GDP).

The last figure I saw was about $7.5 TRILLION for the GDP. So we have a market cap about 170% of GDP. In the 1929 peak, it was 130%. The last figure I saw for the total US asset value of EVERYTHING in the country was $19 TRILLION. But this was about 2 years ago, and though it has gone up since then, it is only a paper gain, which can be collapsed very quickly. Against this, there was total US debt(all levels of government, private, corporate) of almost exactly that maount. So you can see the paradox. Even if we wanted to "get rid of the debt", you can't do it since it would take forever to transact that number of sales, and anyway when such a huge AMOUNT of anything(say, real estate) comes onto the market at once, its value collapses . But the DEBT owed does not change! It's still $19 TRILLION! There is no way out. I hope Greedspin has bought a load of PAMPERS (the ones rated for 35 lbs.) for the weeks ahead. He'll need them.

-- profit_of_doom (doom@helltopay.ca), October 17, 1999.

PLEASE Sir May I have some more? Truly, enjoying your info. You are saying some things in a different light.

-- Debi (LongTimeLurker@shy.com), October 17, 1999.

My understanding is that all money is created from debt, therefore to have a healthy economy, more debt must be created to create more money. Money does not come from anywhere else since it is worthless in itself.

-- Jim (waiting@aol.com), October 17, 1999.

Jim,

You have just described fractional reserve banking. My home mortgage was paid to the seller, giving her "$39,000". I certainly didn't have the money for the loan, where did it come from?? It came from depositors to Broadview Savings Bank. They deposited it into several savings acounts (before the time of Savings banks and DDA's/NOW's). Because Broadview had been chartered to make home loans for member/depositors, the people who had deposited their money there had very little to say about what the S&L did with it. And so this goes on in many iterations, "creating" "money".

I happen to be one of those guys who thinks REAL money comes out of the ground and GLOWS either yellow or silver.

Night train

-- jes a homeownin' ol footballer (nighttr@in.lane), October 17, 1999.

Also the gov.has pledged all U.S.assets to that debt that they owe as colladeral for borrowing all these years.Yes your house and my house are part of that colladeral.The bankers will forclose on the United States of America. And they say there is no conspricy.

-- G (pray@judgement.com), October 17, 1999.

Debi,

You wanna some more-a? Right here on the floor-a?

How bout you Fawna? You wanna?

Give me... your dirty love...

-- Frank Zappa (Z@P.man), October 17, 1999.