Lessons of the Great Depression

Guidelines for preparation

From Tuomas Malinen’s Forecasting Newsletter.

Issues discussed:

• Several of the factors that led the world into the Great Depression are currently in place.

• Preparation for the approaching economic collapse needs to take into account the risk of both deflation and very rapid inflation (even hyperinflation).

• One asset class has the ability to hold or even increase its value through both of the crises.

In the three previous entries, I have detailed the path of the world economy into the Great Depression, concentrating on the U.S. economy. In this entry, I will detail the lessons of the Great Depression and use them, and the lessons from the Weimar hyperinflation, to provide preparation guidelines for the approaching crisis, which can take either of the two aforementioned forms.

The main lessons

The Great Crash of 1929 and the Great Depression of the 1930s present some clear lessons for today. Most worryingly, we are in a path that can lead to repetition of the ‘Great Contraction’. However, I detail ways you can turn the crisis to benefit you.