3/07/2004
The worst is yet to come
Are happy days here again, economically -- or are we headed for disaster? Economist Hans Sennholz offers his view.
After the stock market crashed on October 24, 1929, it rallied thereafter, just as it did after the 2002 decline. Investors were bullish in early 1930, just as they are now.
At the moment, the U.S. is being kept afloat by Asian central banks, primarily in China and Japan, that invest their inflow of dollars in U.S. Treasury securities. But how long will they be willing to trade goods for American paper?
The Great Depression of the 1930s could have been avoided by letting markets readjust. Hoover, then Roosevelt, decided to keep this from happening with a torrent of government intervention.
Most economists today don't realize this. They credit Roosevelt for saving capitalism with his New Deal.
Will Bush or Kerry force this country into a similar "deal" when financial reckoning day arrives?
You can count on it.
After the stock market crashed on October 24, 1929, it rallied thereafter, just as it did after the 2002 decline. Investors were bullish in early 1930, just as they are now.
At the moment, the U.S. is being kept afloat by Asian central banks, primarily in China and Japan, that invest their inflow of dollars in U.S. Treasury securities. But how long will they be willing to trade goods for American paper?
The Great Depression of the 1930s could have been avoided by letting markets readjust. Hoover, then Roosevelt, decided to keep this from happening with a torrent of government intervention.
Most economists today don't realize this. They credit Roosevelt for saving capitalism with his New Deal.
Will Bush or Kerry force this country into a similar "deal" when financial reckoning day arrives?
You can count on it.
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