Oct 13 2008
The Next Depression?
Almost everyone I know is talking about the 18% drop in the Dow Jones Industrial Average last week, which includes concerns about the safety of bank deposits, possible job losses, and diminishing retirement accounts. One of my hobbies is to track financial markets, which is why I thought I’d share a good article by Liz Pulliam Weston called, “How to survive the next depression.” The article does not speculate on whether or not we’re heading for another depression, but it does provide some practical advice on preparing financially for whatever happens to the economy. It also gives some perspective on the differences between our current market downturn (and likely recession) and the Great Depression of the 1930’s.
Here are some key statistics related to The Great Depression:
- It lasted 12 years – from 1929 to the beginning of WWII.
- Led to a 25% unemployment rate (we’re currently around 6%)
- Saw the Dow Jones lose 89% of its value between the peak of September 1929 and the bottom in July 1932.
Obviously, it’s a good time to re-evaluate our financial goals and get informed, but keep in mind that our faith can be tested in times like these.
Consider it pure joy, my brothers, whenever you face trials of many kinds because you know that the testing of your faith develops perseverance. Perseverance must finish its work so that you may be mature and complete, not lacking anything. (James 1:2-4)
