The Great Depression still looms large over us.
Will the Great Depression come back any time soon? In an October 18th Wall Street Journal piece, journalists Brett Arends and Dave Kansas debate the issue. Naturally, both sides seem to make good points. There's no easy way to figure this one out.
This is part of the problem of trying to keep your head about you, looking carefully at evidence, seeking the truth of the matter. It's a lot easier to go with your emotions.
But if you just go with your emotions, here's what happens: if you're naturally an optimist, you think everything's getting better and the idea of a Depression descending on us seems absurd, silly, ridiculous; the pessimist simply sees things the other way.
You don't get at the truth that way. And unfortunately, sometimes the truth just doesn't jump out at you. So what do you do?
Well, you can do lots of reading - economic stuff, investment stuff, etc. But not everyone has time for that. That leaves looking around, keeping your eyes and ears open. What do you see? What do you hear?
Are your friends and neighbors keeping their jobs? If they're unemployed, are they successful in finding new opportunities, or do they seem discouraged?
What's going on with the local stores? Is business holding up? Restaurants look busy? (They're especially sensitive to hard times - especially the fancier places.)
How about you? If you work for a company, do you see layoffs continuing? If you work for yourself, how's business? What's your trend?
You get the point here. You can come up with your own questions. Just spend some time observing. And don't prejudice what you see and hear. Keep your eyes and ears open and be as objective as you can. You might even write down your impressions.
So far, where I live, the restaurants are suffering, and have been for a while - though they seem a bit better now than a year ago. Grocery stores seem OK (then again, people have to eat). Roads, trains and buses are as busy as ever during rush hour. No signs of real serious slow-down of those activities right now. So from my little world, looking at those few areas, we're not in any new Great Depression - right now.
But I'm keeping my eyes and ears open. And I'm doing my best not to let my emotions get the better of me.
Meanwhile, since I do this for a living, I continue to read the economic and investment stuff. But my concern there is more focused on whether we're trending more to deflation, or are about to head into inflation. I'm looking at my clients' assets to see that they're prepared for either.
As for another Great Depression, if it comes, all I can do is try to be as prepared as I can. I'd prefer we don't have one, of course. But I know there's really nothing I can do about it if it comes.
One thing I think does make sense: it's not quite time to sound the "all clear." So I'll come back to this topic from time to time.
Meanwhile, the best advice for right now I can think of: watch what you spend, cut down if you can, do your best to generate income and save as much as you possibly can (that may mean more than you have in the past) and put those savings somewhere safe.
This is part of the problem of trying to keep your head about you, looking carefully at evidence, seeking the truth of the matter. It's a lot easier to go with your emotions.
But if you just go with your emotions, here's what happens: if you're naturally an optimist, you think everything's getting better and the idea of a Depression descending on us seems absurd, silly, ridiculous; the pessimist simply sees things the other way.
You don't get at the truth that way. And unfortunately, sometimes the truth just doesn't jump out at you. So what do you do?
Well, you can do lots of reading - economic stuff, investment stuff, etc. But not everyone has time for that. That leaves looking around, keeping your eyes and ears open. What do you see? What do you hear?
Are your friends and neighbors keeping their jobs? If they're unemployed, are they successful in finding new opportunities, or do they seem discouraged?
What's going on with the local stores? Is business holding up? Restaurants look busy? (They're especially sensitive to hard times - especially the fancier places.)
How about you? If you work for a company, do you see layoffs continuing? If you work for yourself, how's business? What's your trend?
You get the point here. You can come up with your own questions. Just spend some time observing. And don't prejudice what you see and hear. Keep your eyes and ears open and be as objective as you can. You might even write down your impressions.
So far, where I live, the restaurants are suffering, and have been for a while - though they seem a bit better now than a year ago. Grocery stores seem OK (then again, people have to eat). Roads, trains and buses are as busy as ever during rush hour. No signs of real serious slow-down of those activities right now. So from my little world, looking at those few areas, we're not in any new Great Depression - right now.
But I'm keeping my eyes and ears open. And I'm doing my best not to let my emotions get the better of me.
Meanwhile, since I do this for a living, I continue to read the economic and investment stuff. But my concern there is more focused on whether we're trending more to deflation, or are about to head into inflation. I'm looking at my clients' assets to see that they're prepared for either.
As for another Great Depression, if it comes, all I can do is try to be as prepared as I can. I'd prefer we don't have one, of course. But I know there's really nothing I can do about it if it comes.
One thing I think does make sense: it's not quite time to sound the "all clear." So I'll come back to this topic from time to time.
Meanwhile, the best advice for right now I can think of: watch what you spend, cut down if you can, do your best to generate income and save as much as you possibly can (that may mean more than you have in the past) and put those savings somewhere safe.
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