To paint a picture for you, when the Great Depression was at its height, more than 30 percent of the country was out of work. Today, it would be like 60 million people would be out of jobs.
Industrial output crashed that on today’s levels would leave cities barren.
Commodity prices fell so far that, if it happened today, mass starvation would result.
Most economist debate the exact cause of the Great Depression, but they do pinpoint the core of it: confidence. People gave up and, in the light of a continual bombardment of negative messages and perpetual stream of bad economic reports, who could blame them?
Interestingly, there are indications that the economy was beginning to pull out of the Depression a year or so after the crash. The stock market returned to near 1929 levels. Business spending was returning. Wages held. Interest rates were low and credit limits zoomed.
But the people were shaken and shaken people do shakey things. The government, acting in the best of intentions, increased taxes and exacted protective tarrifs, while strictly limiting spending. The results were disastarous and just fed into the negative thinking spiral.
Shaken people tend to find scapegoats and around the world, some people turned to national socialism and communism, and the face of an economic downturn turned evil in the form of Hitler and Stalin.
Are these the cards in our economic deck? Could be. We certainly have the fear and pessimissm that was rampant in the Great Depression and its being pushed by a massive negative-thinking bulldozer called the mainstream media. The cries for protectionism and vague forms of economic justice are just as loud now as they were in the Depression.
It doesn’t have to go down like that, though.
The other possibility is that we are going through a dramatic (and painful) economic reboot, as Change Wave investor Toby Smith terms it. He estimates the economy could return to 1997 levels.
Whether its a Great Depression Redux or a needed economic boost, most of the outcomes starts and ends with us. The key, in keeping with the theme of our business, is technology and positive, independent action.
Quite simply, we have tools that those living through the early 20th century could only imagine.
Today, you could start a business for pennies. And, not just an apple-selling stand outside the soup kitchen, we’re talking about a business that can reach billions of global buyers.
The computational power in your cell phone is more powerful than the computational power in most towns during the early 20th century. Massive computational power means massive productivity and, as a sign of this, productivity–decimated in the 1930s–continues to improve, although certainly not as robustly.
You also can use technology to make better spending decisions and increase competition for your money. Using shopping search engines and doing your own comparison shopping has never been easier.
Eventually, we will have investment systems that use advanced technology to smarten up your investment funds, too.
In short, when you’re at the edge of a cliff, you can do two things: you can ponder the the grandeur of the view, or you can jump off.
I’ll take a picture, turn it into a post card and sell in on Zazzle.
Accelerating Technology, Business Strategy, Investing, Money, Online Investing AI
confidence, depression, Great Depression, Money, positive attitude, poverty
There is one small challenge to this approach. Before we can succeed with any of these individual strategies we have to have the right mindset. It’s like planning a long road trip before making sure our car will make it. Before we get in our car and start driving, we need to make sure that there is enough oil and coolant, and that the brakes are OK. We wouldn’t want to get stuck in the middle of the desert because there wasn’t enough coolant.
is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
