The Next Great Depression? (Part One)

If you’re reading this, there’s a strong chance that your parents or grandparents were born between 1901 to 1927.

You already know this: your loved ones belonged to a very unique generation. A generation of unusual strength. A generation like no other.

The Greatest Generation.

This sounds like a tall and mighty title, doesn’t it?

But, believe me, it’s a title that’s well-earned.

Source: Amazon

The Greatest Generation was the single greatest generation that any human society had ever produced at any point in history:

• The term itself was coined by journalist Tom Brokaw. He had a really persuasive argument about what made the Greatest Generation so remarkable. It all came down to a unique set of circumstances.

• You see, these people came of age during the Great Depression. They lived through a long bout of poverty and pain. Very quickly, they learned to adapt, improvise, and overcome.

• Later on, they would mobilise, going off to fight in the Second World War. They rolled back the tide of evil, defeating it.

• Then they would return home. Rebuilding the world from the ashes. Raising good families. Laying the foundations of prosperity for decades to come.

Source: Image generated by OpenAI’s DALL-E

So, what defined the Greatest Generation? Well, if I had to pick just one thing, it would have to be their moral integrity:

• They understood the value of perseverance. They accepted the need for sacrifice. They embraced the call of duty.

• When faced with terrifying odds, they didn’t flinch. They simply got stuck into the job at hand. Pushing forward. Striving for better. Never stopping until the mission was done.

• Quite simply, these people were courageous. The strength of their legacy is monumental. You can still feel the weight of it today.

My own paternal grandfather, of course, belonged to the Greatest Generation:

• He had very little patience for those who didn’t put in their best effort. He disapproved of folks wouldn’t work to the best of their ability.

• He said: ‘If hard work can cause you to die, well, then you should go ahead and die.’

• Harsh? Not politically correct? Well, yeah, sure. But this is a clear testament to his values, which he shared with many of his generation. Even after his death, my grandfather’s words would still be recited as the gospel truth by his children.

So, why was the Greatest Generation so resilient? What gave them such fortitude of character? Well, perhaps it’s because they had no choice in the matter:

• Their crucible — their training ground — was the Great Depression. It was the most terrible global recession that the world had ever seen.

• This was 10 long years of hardship. And the upheaval wasn’t just restricted to America. Every country, every continent, would feel the seismic impact of this disruption. There was no safe haven anywhere.

• Global trade fell by over 50%. In some places, the unemployment rate rose as high as 33%. This meant that one out of every three working-age person couldn’t find a job.

• Hunger. Anxiety. The people who lived through this time had to endure the full spectrum of grief. Like a refining fire, it tempered their souls. Toughening them up in a hurry.

For me, here’s a grim statistic that stands out. Between 1929 and 1932, real-estate values in Manhattan fell 67%, from peak to trough. Prices wouldn’t fully recover until 1960. Yes, this event was absolutely devastating for wealth:

• So, how might a similar scenario play out in today’s world? Well, perhaps it can be hard to imagine, given the relative prosperity we enjoy right now. But I’m going to try to translate this to a more relatable setting for you.

• For example, in June 2024, the average Auckland house was valued at $1.415 million. So, if we assume that a 67% Depression-style drawdown is possible, this would mean a price drop to around $466,000.

Well, crikey. This is heart-stopping, isn’t it?

• I wonder, if such a thing was to happen, would we show the same strength of character as the Greatest Generation? Would we be able to adapt, improvise, and overcome?

Now, don’t get me wrong. I have no reason to believe that such a property crash is forthcoming:

• In fact, what we’re experiencing right now may be just a cyclical softening in the New Zealand housing market. Given that it’s been 15 years since the Global Financial Crisis, you could argue that we were due for a softening anyway.

• Still, it’s worth asking. Why exactly the Great Depression happen? What is myth? What is fact? And, more importantly, could such an economic upheaval happen again?

I do believe that history can be the best teacher. It can illuminate and reveal even the most obscure of things:

• So I encourage you not to miss this edition of Quantum Wealth Report. Uncovering the truth is critical for you and your family’s long-term happiness.

• This is Part One of my two-part investigative series into the Great Depression. We’re going to be covering all the controversial angles. This will be incredibly provocative, but rest assured, I will leave no stone unturned…