I just watched a video, EndofAmerica33.com (stansberryresearch.com – this is an advertisement). It is interesting to say the least. The subjects discussed include the stock market (the Crash and today), the price of gold and silver, and a looming crisis when the U.S. Dollar is no longer the world’s reserve currency.
I feel that stansberryresearch.com may have either intentionally left out information or has misconstrued some information for the sake of driving fear. Some of the information is stating President Obama is a socialist and is driving the U.S. down the road of England under the Marshall Plan. This is wrong – England was not covered under the Marshall Plan. This made my red flags go up.
He spoke of the Crash and the current recession comparing them. I like to do number crunching and find that the shapes are similar, however, that is where the similarity ends.
Are the Great Depression and the Crash related?
When the stock market crashed in the 1920’s the average stock dropped to 11% of it’s high value. Now, in 2009, the stock market reached a high of just under 14,000. Currently it sits at around 8,000, or about 60% of its‘ high. To reach the same level as the stock market crash of 1929, the stock market would have to plunge to around 1,500.
No, they are only superficially related. What happened after the Crash caused the Depression. The stock market crash happened in 1929 and the Depression started in 1932. However, with the boom in the stock market a large portion of the population started playing the market and taking tremendous risk. They invested everything they had and lost it all in the crash. Businesses still ran and people still worked.
He states that the problems only recently started, however, the problems really started with the creation of the Federal Reserve (not a part of the federal government) in 1913. The job of the Fed is to regulate the flow of money and to be the lender of last resort. It is the only institution large enough to be able to lend the Federal Government funds. How can it do this? By finding ways to “create funds out of thin air” and lending those funds to the government with interest due. This is the debt that newscasts are talking about when they mention the national debt. So as money is needed to get people working and get us out of the Great Depression, the Federal Government had to borrow money. This borrowing has continued through today and is growing worse. Get a copy of “The Creature from Jekyll Island” – fascinating read.
He talks about laws and taxes strangling business in the U.S. The Republican Party has been working since the 1980’s, in earnest and making much headway, to loosen any laws and taxes that are binding on business – this is deregulation. President Reagan was a big proponent of deregulation and pushed it. Every President since, to one degree or another, has been on the same train – both Democrat and Republican. Corporate taxes have been dropping like a rock for well over 30 years.
He claims to be one of the first to warn of the meltdown that happened in 2006. I have found many resources before his such as Bob Prechter (who has done a lot of analysis work with the Elliott Wave) from many years before. I even found – in print – a reference to someone warning of this as far back as the 1980’s.
There are many errors and omissions in his presentation.
What about his message and the crisis that is heading our way? I don’t know. Some people I know are firmly in his camp as to what will happen. He says there are people who will deny this until it actually happens maybe I am one of those, or maybe I believe that people will wake up, wise up and change the course of the future.