1929 was much different and was a cause for much real change that ensured future prosperity (along with being an undamaged WW2 victor). The current stock market is not historically excessivley volatile. The crashing houseing market and credit crisis have yet to play out.
I recall the Carter admin as the gloomiest: something like 10% unemployment, 16% mortgages, gas lines, crime, Iran hostage, etc. It turned out to be the bottom, the beginning of a great bull market in both stocks and RE. Not a parallel to today, just an observation.
For China, they have 300M of their population that have acheived some degree of prosperity mostly dependent on a strong US economy. This segment exerts extreme pressure on their polical leaders for continuation.
I agree with your comment: “the real pain will come to the indulgent, self-entitled, complacent American who has never experienced real pain, suffering, shortages or severe unemployment . . .” (much like 1979).
I slightly favor a Republican administration, but from either side don’t underestimate the power of a charismatic president/admin. I’m not sure who that would be now (maybe Guilianni) but Bush just is not it(amoung other things). Regan, Clinton, Kennedy had it, compare to those who didn’t.
On the dollar, check out: http://eh.net/hmit/exchangerates/ for a long term historical perspective. The relatively controlled (so-far) decline of the dollar is a good thing from my perspective. No country wants to see a collapsed dollar. A weaker dollar is great for our manufacturing, exports, jobs and why other countries build their products here (autos, etc). It is bad for China.
JWM – definately agree with you regarding the polically hamstrung military. Also, the Iraq war is a relatively cheap war to date in terms of our budget and gdp.
The gloom: Historically, all great dynasties have declined or collapsed, so ours is inevitable but when and how bad. Ours is based on capitalism and energy (oil). I say a real plan away from oil to nuke/solar/wind/geo/etc could delay our fate.
