Be Your Own Boss by Harry S. Dent Jr

Author:Harry S. Dent Jr.
Language: eng
Format: epub
Publisher: G&D Media
Published: 2019-03-17T16:00:00+00:00

Source: Courtesy of Hoisington Investment Management, Dent Research

But a lot of people don’t realize that that was a tractor bubble in farming as well. Henry Ford’s new assembly line shot autos in urban areas from 10 percent to 90 percent of households from 1914 to 1929. But it also created a massive productivity revolution in farms through tractors. We were still mostly farmers back then, and people borrowed against their farmland and equipment. When that bubble burst, it was the smaller banks lending to local farmers that tended to be crushed, as opposed to the larger multinational banks, which are creating low-cost mortgages for consumers and mortgage securities for unsuspecting investors today.

Look at how much higher debt got in the U.S. in the recent bubble—over twice that as a percent of GDP in 1929. The greater the bubble, the greater the burst. If we look around the world, we can see that total debt ratios mostly range from 300 percent of GDP to 500 percent, with a few outliers on each side.

Total Debt to GDP Ratios Around the World

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