THE GREAT DEPRESSION VS. THE CREDIT CRISIS: CHAOS & OPPORTUNITIES RICK TOBIN
Will Boom Times Follow The Credit Crisis?
While it is very true that millions of Americans lost their
savings, homes, and jobs during both The Great Depression
and The Credit Crisis, it is also true that much new wealth
was created both during and after these severe economic
depression time periods.
Is “The Credit Crisis” version of “The New Deal” tied more to the financial bailout programs such as
“Quantitative Easing”, “Operation Twist” (or buy long term debt with short term money (or vice versa) in order
to artificially drive down interest rates”), or other bailout strategies which seem to benefit the larger financial
institutions more so than the average American citizen?
Americans are more likely to invest more capital in investments like real estate if they are more certain of
their jobs being there in the near term. Additionally, homeowners are more likely to not “walk away” from their
homes which may currently be in foreclosure if they have some equity to protect.
In spite of a very sluggish recession or
depression since 2007, depending
upon one’s personal perspective or
financial position today, home values
have skyrocketed in many regions
over the past year or two. Amazingly,
some previous “Bubble Bust” states
such as California, Arizona, Nevada,
and Florida have experienced annual
home rates of appreciation reaching
25% to 35% + per year.
After the end of The Great Depression back in 1939, there were many families who created the bulk of their
family’s generations of net worth by creatively and assertively purchasing heavily discounted assets for
literally cents on the Dollar. That $50,000 home may eventually turn into a $500,000 free and clear asset as
time goes by for many savvy investors.
Are the same potential investment opportunities available to Americans today in 2014 as compared with
Americans back in the 1940s or 1950s? Only time will tell.