Not many people would agree that we are in a depression right now. Its a different thing though that the current recession might turn to a depression after continuing for a long time. But whether that will happen cannot be known now. Its true that slowing down slow-down is not the same thing as growth but growth emerges from slowing down slow-down just as recession emerges out growth slowing down. As for the charts of the world induatrial output and the Dow Jones index, it cannot be said for sure that the curve for the current downturn will follow the the curve for the great depression, for that would mean extrpolating accoding to our own choice. We have to have the data to plot the graph and we cannot have a data for a future event. Further all the various data points on Govt tax falling,retail sales slump,unemployment rising,rail loadings etc could change. Economy managers today are far more experienced, have greater understanding of the world economy ehich is much more integrated than the days of great depression. Finally no matter however much the calculations are correct, unless other participants in the market arrive at the same results being correct is of no use in the market. Its what the majority feels, which is what sentiments are. Also investing in stock markets is about staying ahead. The great depression has been followed by one long uptrend.
Not many people would agree that we are in a depression right now. Its a different thing though that the current recession might turn to a depression after continuing for a long time. But whether that will happen cannot be known now. Its true that slowing down slow-down is not the same thing as growth but growth emerges from slowing down slow-down just as recession emerges out growth slowing down. As for the charts of the world induatrial output and the Dow Jones index, it cannot be said for sure that the curve for the current downturn will follow the the curve for the great depression, for that would mean extrpolating accoding to our own choice. We have to have the data to plot the graph and we cannot have a data for a future event.
ReplyDeleteFurther all the various data points on Govt tax falling,retail sales slump,unemployment rising,rail loadings etc could change. Economy managers today are far more experienced, have greater understanding of the world economy ehich is much more integrated than the days of great depression.
Finally no matter however much the calculations are correct, unless other participants in the market arrive at the same results being correct is of no use in the market. Its what the majority feels, which is what sentiments are. Also investing in stock markets is about staying ahead. The great depression has been followed by one long uptrend.