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View Diary: The Great Depression Pt. III (172 comments)

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  •  I'd love to see NewDeal Dem (2+ / 0-)
    Recommended by:
    PsychoSavannah, Ice Blue

    answer this question.  This is one thing that is VERY different from the 1920s and early 1930s.  Is the interconnectedness of the financial system also different?

    Article 6: " religious test shall *ever* be required as a qualification to any office or public trust under the U.S."

    by billlaurelMD on Mon Jan 05, 2009 at 05:09:23 AM PST

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    •  Correct.. (10+ / 0-)

      In 1929 we were the world's biggest creditor.  Now we are the world's biggest debtor.

      Still in WW 2 the National Debt was up to 140% of GDP, and Japan's is about that now.  So long as interest rates on that debt stays low, it is sustainable.  If the interest rates soar, you get Latin American style inflation/debt collapse at the same time.

      I don't think we're there yet, but we are at the point where we've got to be careful imho.

      In inflationary spike by ~2010 wouldn't surprise me (especially if the bailout $$$ does start going thru the system), but although I agree with gjohnsit that Treasury rates at 0% have nowhere to go but up, I suspect that interest rates will not suddenly shoot to the moon.  Rather (and pessimistically) I expect them to begin to rise slowly and to continue to rise for the next 30 years.


      "When the going gets tough, the tough get 'too big to fail'."

      by New Deal democrat on Mon Jan 05, 2009 at 05:17:33 AM PST

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