WARNINGS FROM THE PAST: The Dow In 1937 Vs Today

Sunday, January 27, 2019
By Paul Martin

January 26, 2019

“If we look back at past market tops…This would put a recession in the cards for the US between…”

by Paul Farrugia of First Macro Capital

Much has been discussed, about has happened to the world since 2008, and many investors today are anchoring to the most recent crash in 2008-09. A new crop of investors never even experienced a true crash. But the next crash is never the same as the last crash. The solutions to end the last crash, are typically the fuel and causes for the next crash. Even in the 1930s, after the 1929 crash, investors were waiting for a next similar type of crash. Ray Dalio and the team at Bridgewater have stated, that we are currently going through a 1937 type of environment in relation to the economic and political cycles. The next questions remain: “What happened to the Dow Jones Industrial Average during 1937-1938? What happened to the US Economy in 1937-1938? Did the US enter a recession? Did the Central Banks save the world?

The 1929 Crash vs 2008 Financial Crisis
When we look at the stages from the peak of 1929 to the crash, the Great Depression, then followed by the next business cycle, which then ended in 1937. We can see the similarities of today’s current business cycle to 1929. And where are we today? Stage 6: “Central Bank Tightens a bit, resulting in a self-enforcing downturn.”

Stages of the Cycle as Per Ray Dalio from 1929 Crash vs 2008 Crash

The Rest…HERE

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