In 1920s real estate collapse and stagflation preceded the stock market crash, deflation and depression – history repeating again?
Peter Oberois
Feb. 8, 2007

In 1920’s believe it or not the Florida real estate, especially around Miami, boomed. 40% of the population became real estate agents. Speculators bid up unseen mosquito and gator-guarded swampland to astounding heights. The craze was so high that people would do anything to own a piece of swampland in and around Miami.

Things eventually fell apart. The speculators ran into the last breath of the stock market and pushed it higher. Eventually all collapsed in a financial meltdown. Stock market crashed. The economy went from stagflation to deflation driven depression.

The parallels are clear. New financial instruments called derivatives are there to accelerate deflation and stock market sown trend. The Hedge funds have stopped hedging – a clear sign of complacency. The VIX index that measure Wall Street complacency hovers around ten – a sign of full confidence in the stock market.

In the middle of all this like in year 1929, the year 2007 marks the end of a twenty-year banking bull market. The banks based on cycle study will start going belly up.

It seems history will repeat itself except this time it will be global in nature.

Slightly higher Initial Jobless Claims, lower Wholesale Inventories and lower Wholesale Sales pointing to stagflation slowly changing to deflation – how will markets react
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. The speculative mania reached new highs in most of the asset classes. As stagflation changed to deflation, the Employment and Wholesale Inventories showed no significant changes. People were complacent till the day of the stock market crash.
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In 1920s real estate collapse and stagflation preceded the stock market crash, deflation and depression – history repeating again?
Peter Oberois
In the middle of all this like in year 1929, the year 2007 marks the end of a twenty year banking bull market. The banks based on cycle study will start going belly up.
READ MORE>>

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