I’ve read the article Bob posted today and agree…slightly.
In 1930, the market was not what it is today. There were markets around the world but the US stock market was nowhere as connected to the rest of the world as it is today. The stock market tanked, in 1930, because we had no back up plan. The US had to pull itself up out of it’s misery. We had nowhere near the wealth or access to capital we have today.
Today, countries work together. When the world experiences pain, the world, in some ways, works together to make the pain easier. US Multi-national companies are earning income in multiple ways. Instead of relying on just US consumers, income and revenue is generated across the world. On the flip side, US consumers account for a meaningful percentage of foreign multi-national revenue. Foreign companies want to see US consumers buy things. How the US economy does matters to the world. By GDP standards and Purchasing Power standards, the US is far superior. In 1930, transportation, contact, etc. was no where near what it is today. We live vastly different lives than in 1930. The political environment is much more conducive to cooperation than in 1930. Communism, and its threat is over. The amount of wealth in the world is staggering. The amount of available capital is staggering. You can’t simply brush these things aside and say, because it happened in 1930, it is going to happen again.
Yes, it could happen again. The US and world economy has lots of problems. I am not naive enough to think we are out of the woods. Unemployment will reach 10%. My furniture business is experiencing the same kind of downturn many businesses are.
But, I personally don’t believe we are in for the kind of gloom and doom the article speaks of. I also think Phil probably has an agenda…just like everyone else.