It was a fantastic year when the stock market boomed and major U.S. companies made huge profits in domestic and foreign markets. New technology totally changed many industries, and financial pundits told us that we were on the edge of a new level of prosperity. Politicians, business leaders, and economists told us that the future was incredibly bright. No, that was not in recent years but in 1929! >From May of 1928 to September of 1929, stocks jumped forty percent! In fact, trading in 1929 was more than twice that of 1928.
Newspaper headlines on Oct. 24, 1929 (Black Thursday) screamed, "Wall Street in Panic as Stocks Crash." President Hoover (not "President Roosevelt" as our newly elected VP declared!) assured the American public that it was only a little correction, but the prosperous became paupers overnight. The best stock on Wall Street was General Motors, selling for 73 and after the crash, it fell to eight!
Men jumped from skyscrapers when their wealth was wiped out in the market. Powerful men were reduced to selling fruit on the streets for pennies. Bread lines were a block long. U.S. unemployment was 25% and about 10,000 banks failed. In addition, our nation did not come out of that depression until the Second World War, twelve long years! Better keep that fact in mind.
It must be kept in mind that even after the stock market crash, political, business, and financial leaders were telling all who would listen that it wasn't really that bad! The U.S. Secretary of Commerce reported in early 1930 that business was doing well! He said that 1930 would be a "normal" year and those who predicted prolonged depression were "foolish." Then, on Dec. 6, 1930, when the market had plunged through its 1929 low, unemployment was rising sharply and business and bank failures were setting records, he said in a radio speech, "We have weathered the storm and signs of stability and recovery are already appearing." He must have been president of the League of the Willfully Blind!
Treasury Secretary Andrew Mellon assured the nation in early 1930, "I see nothing in the present situation that is either menacing or warrants pessimism." Mellon must have been vice-president of the League.
The New York Times jumped into the parade in its Jan. 24, 1930 issue with headline blaring, "TRADE RECOVERY NOW COMPLETE- No Stimulants Needed-PROGRESS IN ALL LINES BY EARLY SPRING IS FORECAST." Many major leaders gave such false assurances with no solid, sensible, or sane reason to believe them. America was being broken, and our leaders were playing politics to keep everyone from panicking.
We are hearing the same kind of assurances today as the world is brought to its knees. (May not be a bad position!) So get ready for a wild ride that may last for years and be far worse than the hot shots in Washington and New York are telling us. Remember that these are the same people who only now are using the word "Recession" while some of us are using the word "Depression." It may be that in a few weeks everyone will use the word, "Panic."
Economist Richard Yamarone said recently, "There is no light at the end of the tunnel, and the outlook is pitch black." With stocks in a free fall, U.S. jobless number is now at 10 million, major banks and corporations going belly-up, it is almost too late to lash yourself to the mast to keep from being washed overboard. Don't even open your monthly 401-k statement. It may be worth only $401.00!
While pessimism is not my nature, I see a dark cloud on the horizon. First, a major Depression followed by massive inflation. Informed Americans should make plans for some very difficult years ahead. Because life is so uncertain, every thoughtful person should always be prepared for anything. Another terrorist attack is coming with only the date unknown; a major natural catastrophe totally unforeseeable; a major race war touched off by some religious or racial nut; or a total collapse of the economy resulting in no jobs, no money, no gas, no food, and no silver lining. Get ready today for whatever may come tomorrow.
I have written before that we don't have to know the future to prepare for the future. So prepare today. The most compelling preparation is spiritual. Do you know Christ in forgiveness of sins? Are you in a good church that helps provide support? Take care of those things immediately.
Then head for the store and purchase what you need to stay alive. Humans need, that is absolutely need, air (can't do much about that), water, food, and shelter. Everyone should maintain a rotating food pantry of non-perishable foods such as dried beans, rice, salt, sugar or honey, and canned foods (which don't require cooking) to name a few to get you thinking. Also, think about essential personal products and include toilet paper, soap, and medicines.
This is a good time to prepare a garden spot if you have any ground to use so you would need garden tools and other supplies as well as non-hybrid seeds. It would be good to plant some fruit trees.
Simply put: For the storm that is approaching, you need God, groceries, gold, guns, and a garden. Forget about living well because those days are gone for a long time, if not forever. Look for this headline: PANIC ON WALL STREET AND MAIN STREET!
And that's from an optimist!
Copyright ©2008 Dr. Don Boys, Ph.D.