Is Everything You Learned about the Great Depression Wrong?

This was a very good interview with Robert Murphy. a differerent take on the great depression.

By Andrew Mickey, Q1 Publishing

What if I asked you to forget everything you ever learned about the Great Depression?

You’d say I was crazy.

But hold on for a moment and consider a slightly different perspective. A perspective that you won’t find in too many history books. And, quite frankly, a perspective that could allow your portfolio to be much better positioned for the years ahead.

After all, with everything going on the world and the repeated references to the “worst downturn since the Great Depression,” learning the lessons of history is probably more crucial to your investment success than ever before.

Nobel Laureate Peal S. Buck probably put it best, “If you want to understand today, you have to search yesterday.”

That’s why I’m eager to share with you a different perspective on the Great Depression today from Dr. Robert Murphy – a “politically incorrect” one.

Dr. Murphy is a former economics professor and author of The Politically Incorrect Guide to the Great Depression and the New Deal.

In an exclusive interview with Andrew Mickey, Q1’s Chief Investment Strategist, Dr. Murphy reveals:

- The single biggest thing that made the 1930’s so awful
- The true “cost” of the $787 billion stimulus program
- Why unemployment is on the verge of going higher than anyone expects
- How some investors were able to profit handsomely during the Great Depression
- The real impact of a 200% increase in taxes and why it could be coming again

All that and more is discussed below in this irreverent and thoughtful look at the Great Depression.

Read Part one HERE

Read Part two HERE

Andrew Mickey: Still though, the market continues to rally. It’s up 50% from the lows and everyone – from politicians to Main Street - is watching the market very closely.

Do you see a potential impact of a strong stock market rally and the fact about 70% of Americans hold stocks and mutual funds now and in the 30’s it was closer to 3%?

Robert Murphy: It’s certainly true that more people are involved in the stock market now, whether directly trading or because of the exposure they have in mutual funds and things like that.

So I think more Americans now are directly exposed to the stock market than was the case in the '30s.

Andrew Mickey: Do you see this as helpful or could it make the situation even worse, or just as bad, as the Great Depression?

lf it were a 1931 kind of situation where all looks well, there are plenty of “green shoots,” and rising unemployment, then it would be a great time to get out of stocks pretty soon…

Robert Murphy: Well, it's true that if you look at the stock market level as it crashed in October of ’29. That was the great crash. The market fell something like 12% and 13% back to back. So that's when everyone was panicking, people were literally jumping out of windows.

The early 1930’s was also the time Hoover called the big business leaders and told them not to cut wage rates. Initially, that's what I think was the cause of unemployment going up so high. It’s the fact that the businesses wouldn’t let the wages adjust to the market level.

In any event, in the early 1930s the stock market did recover a lot of the lost ground. People at the time said, okay, we got through the storm and everything is behind us, and the ‘20s are now going to continue into 1930s.

And so they were lulled into a false sense of security…the calm before the storm, if you will. There were a few points during the 1930s when they finally thought they had hit rock bottom, and yet, they had no idea that the worst was still in front of them.

So I do think that the position we are in right now, people talking about green shoots and so on, and that maybe the economy has finally hit rock bottom, I don’t think it has. I think that three years from now people are still going to be saying, when are we going to get out of this thing?

[edit on 10-8-2009 by TrainDispatcher]

Is this blatant advertising posing as a post?

It's not nice to spam the ATS list.

reply to post by TrainDispatcher

Good post, even if it could be taken as a advert for a book.

The evidence to back up this post can be found right here.

Though it has been posted in pieces elsewhere, it fits here too.

It has been confirmed by other news sources now that the
$134 billion in US bonds were likely real, and the japanese
men sneaking them around were likely japanese ministry of finance.

If that is true and they are trying to quietly dump them on the
market and other countries start doing it, we don't have long and
it is likely the trigger event for the Wall street journals mentioned
upcoming nationwide bank shutdown.

*** The two below say that the two japanese men stopped
with supposedly fake bonds were released...And if they
had been fake they would have broken the law and be
held on counterfeiting charges.
This says the japanese are dumping US bonds secretly
to get off the ship before it goes beneath the waves...

www.freerepublic.com...

market-ticker.denninger.net...

We saw a failure of the 5 year bond sale of T-bills.

market-ticker.denninger.net...

Then the failure of the 7 year bond sale of T-bills.

market-ticker.denninger.net...

*** Below says US foreign Embassys are being told to horde
1 years worth of non-US currency due to a possible
lengthy banking shutdown.

www.marketwatch.com...

Speaking of shutdown, 7 banks in one day went poof...

www.fdic.gov...

Close to 600 Bank of America locations to be closed.

news.yahoo.com...

FDIC top level official says bank closures to increase 10 fold.

moneynews.newsmax.com...

I can see why she would say that with near 2,700 banks being
rated D+ or lower.

www.moneyandmarkets.com...

Over 1,000 Trillion in derivatives are set to implode.

theinternationalforecaster.com...

Once they monetize the debt and start printing money like mad
to buy our own debt up, they will devalue the currency and
turn the US into a modern day Zimbabwe.

They outline how this is likely to happen in these three videos.

www.youtube.com...

www.youtube.com...

www.youtube.com...

The tax revenues have dropped more than anytime since the Great Depression.

www.huffingtonpost.com...

The real U6 unemployment rate is closer to 21%.

blogs.moneycentral.msn.com...

34 million ppl on food stamps, more than ever before.

www.forbes.com...

I know one thing is for sure....... the main thing people lost then, was just superficial, like "status" and "pride"...woopie doo....

Most of them had land and farms and cold feed themseleves and their families.....

All most of them lost was their "look, I'm a princess in a palace" status's......

What a lot of people have grown up with these days their entire lives is way worse than what they went through.....and I mean since day one.

Most of our grandparents generation, and ESPECIALLY our parents generation, just turned into greedy horders as a result..and were/are not only greedy when it comes to their own children, but have this complete sense of entitlement and justification for never supporting their own families and children etc.....

THEN on top of it, they have allways ridiculed and made to look weak, any of us for being "generous" in our generation....

I am truly ashamed of most (not all but MOST) of that generation for their, screw you attitude towards their own children and grand children, and the way thier materialism and ego/pride has paved the way to ruin the planet for the future...

Then also, our generation, who is trying to fix thier mess, get mostly ridiculed for our ideas and healthy lifestyles to try and make things sustainable for our children and any after them.....

Well, I could be wrong, but that has been MY personal experience, ENTIRELY....

I am utterly and totally ashamed of my greedy aunt, and mother and father etc....then again, I was adopted, out of convienence to save a "marriage", then hated and resented by both as soon as the divorce went through, so it could be just me, but I do see sooo many baby boomers whom also have seemingly fed their own offspring to the dogs...

Aren't they the ones in charge of most corporations these days, paying pathetic minimun wages to the peers of their own kids and grandkids?

Yes... they are.

[edit on 11-8-2009 by mellisamouse]

You can't really compare the two. The 1930s was almost like the 1800s ... people had electric lighting and radio, some had cars, but that was about it.

Life was very challenging back then. I wasn't around then, so I can't say if it was worse, but it was not a walk in the park like life has been since the 1950s.

What is happening now is the collapse of the system that came into being after World War 2 in the Western world. People can hold on to what's left of it, and be miserable, or we can make our own new system.

This is not a "recession" like in the early 80s, or early 90s.