Wednesday, April 15, 2009
"The events of the past 10 years have an eerie similarity to the period leading up to the Great Depression. Total mortgage debt outstanding increased from $9.35 billion in 1920 to $29.44 billion in 1929. In 1920, residential mortgage debt was 10.2% of household wealth; by 1929, it was 27.2% of household wealth." This is from a recent Wall Street Journal article. I recall as a child in Catholic school, the nun saying that in the pleasure centered 20s there had been installment debt and that this led to the Depression. One wondered how toasters and even cars could have had such a profound consequence. Then when I read Friedman on 'The Cause of the great Depression' I put away such childish thoughts. The nuns are looking better. Of course, I wish I could have integrated the history they gave with the events of 2001-5. As a corollary to that, I need to get back to work, you might leave a question if you want.