News from the 1930s
I came across an interesting website today called News from 1930. I wish that there was actual scans of the papers so that we can see if these quotes were really in there, but if tey are real they sure are interesting.
Check out these interesting quotes from the Wall Street Journal - August 28, 1930:
There's a large amount of money on sidelines waiting for investment opportunities; this should be felt in market when “cheerful sentiment is more firmly intrenched.” Economists point out that banks and insurance companies “never before had so much money lying idle.”
Fed. Reserve seen continuing easy credit policy pursued since start of year. Some concern that increased reserve credit “will flow into speculative channels,” but this doesn't seem to have happened much yet.
Sound familiar? I'm not saying that we're headed for a depression like we saw back then. I don't believe that we are, just that the people who think that all of the money that is currently supposedly sitting on the sidelines will force the market much higher without the earnings and revenue growth to back it up are likely going to end up being sadly mistaken.
Similarly, unless foreign governments are completely repulsed by the rapidly growing U.S. national debt and in turn the value of the dollar drops significantly, I'm not buying the whole the Fed's current policy is too loose and it is going to create hyper-inflation theory either.