The Dow in 1937 vs Today…Warnings from The Past
The comments below are an edited and abridged synopsis of an article by Paul Farrugia
“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?”
Farrugia discusses the 1929 crash vs. the 2008 financial crisis; the Fed is caught in the same trap as 1937; the ghosts of the Dow in 1937; where we are today; and a recession is in the cards for 2019.