posted on Jul, 25 2012 @ 07:39 PM
reply to post by Trueman
Think of it this way: the economy of the 20's and 30's was much more domestic and Agra-based than today's. So, an economic shock (driven by
drought) after a financial collapse was a horrible combination of events....
Now, financials dominitate the market cap of financial markets and the economy is far-less Agra-based.
What does this mean? The Euro crises impacts a lot of things (especially financials), the lack of rain here in the US could drive commodity inflation
(rising food prices), and an overall slowdown in economic activity (see recent manufacturing and service surveys and their patchy results), and that
is your "bear-cases"
"THIS TIME IT'S DIFFERENT" is usually a huge red flag in finance....but in this case, the risks are far more diverse and complex than the
drought....which could hurt pocket books -- but alone, not drive financial chaos ...