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A lot of people comparing this to 1929, but there are a few things that are substantially different: * unprecedented scale and speed of QE and government stimu

A lot of people comparing this to 1929, but there are a few things that are substantially different: * unprecedented scale and speed of QE and government stimulus * the Federal Reserve has stated they will provide "unlimited QE" * the markets are a lot more efficient now than they were in 1929 * in the 1930s, credit and banking was, in many ways, still in its infancy * today's widely available technology was science fiction in the 1930s PS: There's an interesting documentary on YouTube about the Great Depression, part 1: https://www.youtube.com/watch?v=bCEJ65H_1XE https://www.youtube.com/watch?v=bCEJ65H_1XE part 2: https://www.youtube.com/watch?v=gO42ZfCN9ug https://www.youtube.com/watch?v=gO42ZfCN9ug. It's worth watching if you want to understand what happened in the 1930s.

aguyfromnb 7y ago
>A lot of people comparing this to 1929, * Greatest downturn since the depression doesn't imply the mechanics are the same. It's a comparison of scale. * Unlimited QE isn't free. TINSTAAFL. * The stock market is not the economy. * The economy isn't the US economy (it is global) I'm a proponent of what the Fed, and central banks around the world, are doing. But I feel like people are viewing this as a "pandemic passes, back to normal" situation. There were cracks beginning to show in the late cycle of the economy for over a year. The pandemic just happened to be the exogenous shock, and a bad one at that. Remember, we just got through a decade long bull-market that mostly benefited the asset-rich classes. We have unbelievably polarized politics around the world. There's evidence of corruption in all of our institutions. Are we really ready to handle this?
op03 7y ago
Good points. The hyperconnected world did not exist back then. It will definately make a big difference to outcomes. I have been quite surprised the internet remained up, in different parts that were hit really bad.
- bamboozled 7y ago
  The issue is, the people who run the show now don’t understand that hyperconnected world and all it’s marvellous possibilities. They’re busy throwing “unlimited QE” trying to restore a world they know and remember that is now gone for good. Trying to restore oil, and bail out legacy companies. It would be wise to invest in the future instead.
  - op03 7y ago
    That has nothing to do with People up and down the food chain, who know how to get things done and take advantage of the hyperconnection, rebooting their ops. The advantage of the network over hierarchies, is reboots dont happen top down. They happen all over the network simultaneously. For example these days I don't wait for my boss or his boss to resolve gating issues if I know people at their levels of the hierarchy who can do it faster. Thats possible if you are well networked. And lots of people are these days, compared to 1930.
    - bamboozled 7y ago
      Governments can help fund and facilitate though.
hajile 7y ago
The biggest difference is food. Today, we have a transportation problem, but back then, we often didn't have food to transport.
- brenden2 7y ago
  There was actually a surplus of food in the 1930s, but farmers decided to burn their crops instead of selling it at a discount. Kind of like the current situation with oil: a massive supply glut. [0]: https://en.wikipedia.org/wiki/Agricultural_Adjustment_Act https://en.wikipedia.org/wiki/Agricultural_Adjustment_Act [1]: https://www.nytimes.com/roomfordebate/2010/11/21/do-farm-subsidies-protect-national-security/fdrs-disastrous-experiment https://www.nytimes.com/roomfordebate/2010/11/21/do-farm-sub...
nikhizzle 7y ago
I think you may have missed the most important difference. Both President Hoover and the Federal Reserve reacted by tightening monetary and fiscal policy. Their intentions were good, Hoover wanted a balanced budget and the Fed was attempting to defend the US Dollar peg to gold. The unfortunate and unintended consequence was that the policies sucked all the oxygen out of the room and extinguished the flame of the economy. This time, building on what Chairman Bernanke started, we are doing the opposite. He advocated for QE, and loose monetary policy. My personal opinion is that this will not end well, but may take up to a decade to come to it’s natural conclusion.
- bamboozled 7y ago
  While my understanding of economics and QE is basic. Printing money won’t make up for lost opportunity and produce which will come out of this. Does “unlimited QE really work ?” In my view governments are way too focused on the economy as it is / was rather than innovative solutions and investment into transitioning into something new and more resilient. You’ll often here Trump saying “reopen the economy”. “The economy” he knew is gone. It’s changed forever, time to evolve. I’m going to say that what contributed to getting us out of the Great Depression was (amongst other things) was that humans better adapted to that environment.
  - viklove 7y ago
    QE "works" because it keeps wealthy investors wealthy, and they're the ones funding campaigns and hiring people like Bernanke after they retire from government. It works for the people making the decisions, and the people funding them, so you bet it's going to continue happening even if it means the American standard of living will continue to drop.
new2628 7y ago
What is your take, all these specific differences will make it better or worse?
- fredoliveira 7y ago
  Not OP, but the assumption is that these are all things that can make recovery more efficient and fast.
- brenden2 7y ago
  I think it's too early to make any predictions.
JohnJamesRambo 7y ago
Most of your differences involve just creating money out of thin air more. I don’t see how that will fix it. What it reminds me of most are things like assignats before the French Revolution. But at least those were said to be based on something (seized church land). We make our money up based on nothing right now. It’s absurd and after it all falls it will seem so obviously stupid to historians. https://en.wikipedia.org/wiki/Assignat#France https://en.wikipedia.org/wiki/Assignat#France
- dustingetz 7y ago
  Not creating money out of thin air. Creating it out of military
  - deleted 7y ago
    [deleted]
- koonsolo 7y ago
  Not printing money could be far worse. Check out the Ray Dalio video on how QE is used for stability. https://www.youtube.com/watch?v=PHe0bXAIuk0 https://www.youtube.com/watch?v=PHe0bXAIuk0
- agentultra 7y ago
  I'm not an expert but I don't think our money is based on nothing. As I understand it it is based on the relative debts and wealth of other nations [0]. [0] https://www.mentalfloss.com/article/12715/why-did-us-abandon-gold-standard https://www.mentalfloss.com/article/12715/why-did-us-abandon...
  - brenden2 7y ago
    By definition, fiat currency is literally based on nothing. Or, more correctly, fiat currency is based on a shared collective delusion that it has 'value'.
    - ruds 7y ago
cm2187 7y ago
When I read greatest recession since 1929, I don’t read it is going to be like 1929, I read it is going to be worse than 2008, where are the tools you mention were already there.
- brenden2 7y ago
  Yes fair enough. QE was a thing in 2008, but it took them a lot longer to turn on the money printers. This time they were very swift.
  - genofon 7y ago
    yes and assets started to bubble because of the hidden inflation of QE. What do you think it'd going to happen by just keep printing money, 10% to normal people and 90% to businesses ?
deleted 7y ago
[deleted]

aguyfromnb 7y ago

>A lot of people comparing this to 1929, * Greatest downturn since the depression doesn't imply the mechanics are the same. It's a comparison of scale. * Unlimited QE isn't free. TINSTAAFL. * The stock market is not the economy. * The economy isn't the US economy (it is global) I'm a proponent of what the Fed, and central banks around the world, are doing. But I feel like people are viewing this as a "pandemic passes, back to normal" situation. There were cracks beginning to show in the late cycle of the economy for over a year. The pandemic just happened to be the exogenous shock, and a bad one at that. Remember, we just got through a decade long bull-market that mostly benefited the asset-rich classes. We have unbelievably polarized politics around the world. There's evidence of corruption in all of our institutions. Are we really ready to handle this?

op03 7y ago

Good points. The hyperconnected world did not exist back then. It will definately make a big difference to outcomes. I have been quite surprised the internet remained up, in different parts that were hit really bad.

bamboozled 7y ago
The issue is, the people who run the show now don’t understand that hyperconnected world and all it’s marvellous possibilities. They’re busy throwing “unlimited QE” trying to restore a world they know and remember that is now gone for good. Trying to restore oil, and bail out legacy companies. It would be wise to invest in the future instead.
- op03 7y ago
  That has nothing to do with People up and down the food chain, who know how to get things done and take advantage of the hyperconnection, rebooting their ops. The advantage of the network over hierarchies, is reboots dont happen top down. They happen all over the network simultaneously. For example these days I don't wait for my boss or his boss to resolve gating issues if I know people at their levels of the hierarchy who can do it faster. Thats possible if you are well networked. And lots of people are these days, compared to 1930.
  - bamboozled 7y ago
    Governments can help fund and facilitate though.

hajile 7y ago

The biggest difference is food. Today, we have a transportation problem, but back then, we often didn't have food to transport.

brenden2 7y ago
There was actually a surplus of food in the 1930s, but farmers decided to burn their crops instead of selling it at a discount. Kind of like the current situation with oil: a massive supply glut. [0]: https://en.wikipedia.org/wiki/Agricultural_Adjustment_Act https://en.wikipedia.org/wiki/Agricultural_Adjustment_Act [1]: https://www.nytimes.com/roomfordebate/2010/11/21/do-farm-subsidies-protect-national-security/fdrs-disastrous-experiment https://www.nytimes.com/roomfordebate/2010/11/21/do-farm-sub...

nikhizzle 7y ago

I think you may have missed the most important difference. Both President Hoover and the Federal Reserve reacted by tightening monetary and fiscal policy. Their intentions were good, Hoover wanted a balanced budget and the Fed was attempting to defend the US Dollar peg to gold. The unfortunate and unintended consequence was that the policies sucked all the oxygen out of the room and extinguished the flame of the economy. This time, building on what Chairman Bernanke started, we are doing the opposite. He advocated for QE, and loose monetary policy. My personal opinion is that this will not end well, but may take up to a decade to come to it’s natural conclusion.

bamboozled 7y ago
While my understanding of economics and QE is basic. Printing money won’t make up for lost opportunity and produce which will come out of this. Does “unlimited QE really work ?” In my view governments are way too focused on the economy as it is / was rather than innovative solutions and investment into transitioning into something new and more resilient. You’ll often here Trump saying “reopen the economy”. “The economy” he knew is gone. It’s changed forever, time to evolve. I’m going to say that what contributed to getting us out of the Great Depression was (amongst other things) was that humans better adapted to that environment.
- viklove 7y ago
  QE "works" because it keeps wealthy investors wealthy, and they're the ones funding campaigns and hiring people like Bernanke after they retire from government. It works for the people making the decisions, and the people funding them, so you bet it's going to continue happening even if it means the American standard of living will continue to drop.

new2628 7y ago

What is your take, all these specific differences will make it better or worse?

fredoliveira 7y ago
Not OP, but the assumption is that these are all things that can make recovery more efficient and fast.
brenden2 7y ago
I think it's too early to make any predictions.

JohnJamesRambo 7y ago

Most of your differences involve just creating money out of thin air more. I don’t see how that will fix it. What it reminds me of most are things like assignats before the French Revolution. But at least those were said to be based on something (seized church land). We make our money up based on nothing right now. It’s absurd and after it all falls it will seem so obviously stupid to historians. https://en.wikipedia.org/wiki/Assignat#France https://en.wikipedia.org/wiki/Assignat#France

dustingetz 7y ago
Not creating money out of thin air. Creating it out of military
- deleted 7y ago
  [deleted]
koonsolo 7y ago
Not printing money could be far worse. Check out the Ray Dalio video on how QE is used for stability. https://www.youtube.com/watch?v=PHe0bXAIuk0 https://www.youtube.com/watch?v=PHe0bXAIuk0
agentultra 7y ago
I'm not an expert but I don't think our money is based on nothing. As I understand it it is based on the relative debts and wealth of other nations [0]. [0] https://www.mentalfloss.com/article/12715/why-did-us-abandon-gold-standard https://www.mentalfloss.com/article/12715/why-did-us-abandon...
- brenden2 7y ago
  By definition, fiat currency is literally based on nothing. Or, more correctly, fiat currency is based on a shared collective delusion that it has 'value'.
  - ruds 7y ago

cm2187 7y ago

When I read greatest recession since 1929, I don’t read it is going to be like 1929, I read it is going to be worse than 2008, where are the tools you mention were already there.

brenden2 7y ago
Yes fair enough. QE was a thing in 2008, but it took them a lot longer to turn on the money printers. This time they were very swift.
- genofon 7y ago
  yes and assets started to bubble because of the hidden inflation of QE. What do you think it'd going to happen by just keep printing money, 10% to normal people and 90% to businesses ?

deleted 7y ago

[deleted]