When the United States had a firm grip on the world economy following World War II, all was well. The American Dream was in full swing and being fulfilled year after year as the baby boomers grew up. But all the while rot was setting in, subtly at first but now screaming for attention. We closed our eyes when manufacturing jobs started going overseas because the relatively basic skills necessary could be found elsewhere at half the price that years of excessive labor union demands here had driven them to.
Those of you who read my column in the Spring issue know I’m not talking about some new super vitamin but rather the gathering storm of negative economic forces that I believe will, in spite of government interventions, result in a pernicious and long-lasting mega depression. The dreaded hyperdeflation.
Let’s start with a small review of history; the stock bubble of 1929. Then, as now, there was an excessive debt behind the collapse but most people either owned their homes outright or had a conventional mortgage requiring decent equity. A lot of them, of course, were in the stock market, but nothing like now (401k’s), and there were no credit cards or car loans either.