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Depressed About the Next Great Depression

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Depressed About the Next Great Depression

Dat Luu explains his theory on why the economy is bound to crash in 2019

Dat Luu explains his theory on why the economy is bound to crash in 2019

Divitya Vakil

Dat Luu explains his theory on why the economy is bound to crash in 2019

Divitya Vakil

Divitya Vakil

Dat Luu explains his theory on why the economy is bound to crash in 2019

By Dat Luu, Staff Contributor

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So many things happened during the last couple of months. For those who have been keeping up with the political climate of our times, you are encountering rising global tensions, and the American people’s faith in our political institutions is wavering.

If the curious look at the current state of the economy, one sees prosperity. Many are saying that the American bull market– a period of growth in the value of stocks– is the highest it has ever been. The fervor and excitement are in lieu of the ten year anniversary of the worst economic downturn the world has suffered since the Great Depression. Both events impoverished the United States in a matter of days.

The outrage over the lack of answers was never before so intense after those critical events in history. The crashes seemed so obvious in hindsight, as news outlets lamented the seemingly unforeseeable tragedies earlier this September. The signs were all there: the useless bonds, the wavering optimism. No doubt there were those who spoke out, but such is the nature of the issue that neither precautions nor actions were taken. Who wants to believe that an imminent disaster is real if, in fact, market crashes are an inevitable process? It raises too many questions. Who is to blame, what can we do, and why can’t this be stopped?

Our current projection of success is frankly a sham. Companies have been spending their own money or taking out loans, sometimes reaching billions upon billions of dollars, to buy their own stocks. The impression of value for said stocks increases based on the process of being bought and sold. By buying their own stock, companies can inflate the impression of their success to the public eye even if they aren’t actually expanding, producing more, or gaining profitability.

There is a reason why this was illegal until the Reagan administration; It creates the illusion of growth without the inconvenient necessity of actual, tangible growth. Coupled with a very little decline in productivity in the workforce, the overall valuation of the stock market has risen essentially unimpeded year after year.

A crash is most certainly coming, and soon.

A common theme in the 20th century until the present day is that market distortion have compounding effects, with production surpassing consumption. Because everything receives its value in relation to everything else, these contradictions result in bubbles in markets such as technology and real estate, based on nothing but the appearance of profitability. You have situations where the market “corrects” itself where the economy is reassessed with more reasonable valuations, but aside from some money being lost, things continue right along. A serious “correction” would be a recession, while a “worst case scenario” would be a depression, where the market just halts because of a glut of produce. I am happy to announce that we are rapidly, rapidly approaching this situation.

I came into this conclusion at the beginning of the year. After that, it took me several months to really come into terms with what I knew. An economic crash? My life just started! I am just about to end high school, to go to college. I haven’t even kissed a girl yet! Why me? Why my generation? Nobody can really say what will happen after this event, but rest assured, it won’t be good. Canned food-wise, I recommend Progresso.

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