Introduction
As discussed in the articles before, the economy worldwide seems stagnant and waiting for the next recession or correction, but is it the case? This article will compare the current situation with The Great Depression in 1929 and The Great Recession in 2008 and see what we can say about the current situation.
1929. The Great Depression
In 1929, many persons participated in the stock market because financial institutes had proliferated after 1927. Besides, the mass media and many salespeople kicked in to promote securities. The movement led to raising the public money to heat up and worsen the bubble in the stock market. What is more, The Great Depression was caused partly by the unique circumstances after World War 1.
Meanwhile, in Japan in 2019, people are not so excited about the general investment. Furthermore, we do not have any unusual circumstances except that the central banks are executing quantitative and qualitative monetary easing policies.
Therefore, It seems that the lessons of The Great Depression do not suggest that the current situation and the circumstances during that period are similar because, at the moment, it is hard to say that the stock market is in a bubble.
How about the comparison between the situation now and in 2008?
In 2008, capitalism drove people into doing wicked things because there was no restriction whatsoever to prevent riskily and exploiting investments from existing. That led to the disaster.
No comments:
Post a Comment