Home > Dollar, Economy > IN THE STOCK MARKET, IT’S 1937 ALL OVER AGAIN

IN THE STOCK MARKET, IT’S 1937 ALL OVER AGAIN

January 3, 2011

One of the most worrisome problems in the stock market right now is that we are basically repeating the exact same situation that occurred from 1937 to 1942.

Most Americans think we’ve had this amazing stock market recovery since the financial crisis of 2008… and we have to a certain extent.

But we are by no means out of the woods.

In fact, during America’s last real economic collapse, in the 1930s and 1940s, we saw a similar drop and recovery… before the markets crashed all over again.

In fact, the situation is eerily similar.

Look at this chart… it’s one of the scariest I’ve seen in a long time. It shows an overlay of what happened in the stock market in 1937 compared to 2008. In both situations, we saw big crashes, of about the exact same magnitude… then a big recovery, again of about the same size.

But what will happen next?

Well, if history is any guide, we could well have another big leg down in the stock market. That’s exactly what happened 70 years ago.

And with all of the problems left unresolved in our economy today, it could certainly happen again, especially if the U.S. dollar loses its reserve status.

http://www.stansberryresearch.com/pro/1011PSIENDVD/PPSILC42/PR

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