10 Worst US stock market crashes in the US

Dang, you caught that post before I went back and did an edit. I haven't studied the gold standard, but I understand it had some issues, but I think organizations such as gold money that can divide up gold into grams and do transactions with ATM cards maybe a solution now that technology is there. I'm sure whatever problems there were with the gold standard can be resolved, but a system of credit will always fail in the end (at least historically systems of credit have always failed).

I think in ancient Rome a gold coin would dress you from head to toe (sandals, toga, etc). A gold coin today will still get you a decent suit and shoes. Our forefathers had a lot of good reason to say only gold and silver will be money (Article I section 10 of the united States Constitution).

I'll look for that History channel special as well, I'm curious now.

Hehe, getting off-topic, but still a good discussion...


That's actually a myth. The founders said that no state could mint non-gold or silver money, it makes no such provisions about federal currency. The constitution was largely intended to smooth trade between the states, and if each state could print it's own paper money then that would be a barrier to trade. Thus they reserved the right to do so only to the federal gov't, since federal money would be honored by all states.

[It is arguable whether such powers can be transferred or delegated to another authority (ie: the fed) but that argument is moot now.]

Specifically...

No state shall do those things. Section 10 is specifically designated "Powers Prohibited of States" and is one of the few places where the constitution specifically denies rights to states.

Why? Because those are all things a nation would do. The founders also intended to clarify that the United States was not just a loose alliance of individual nations, but rather a single nation comprised of states.

I do find it interesting that states cannot make a law impairing the obligation of contracts, when there are numerous instances of it in an assortment of state laws (housing and property law, for instance) today. I do not know if this has ever been used to challenge such laws, that would be interesting.

Yes but that's a system of credit too. It's just connected to imaginary gold at some point. Since the beginning of time people have used credit-based systems in one form or another, they just might not have realized it. Ever since someone decided to lend something, we had credit-based currency.

Even precious metal represents an amount of faith in the people that assessed the value of the metal.

There are dangers of non-precious metal currency, but there are dangers of precious metal currency too. Both are well known. The battle of paper money is that of controlling inflation. That of metal-backed currency is the inverse, ie: controlling deflation. All because a growing economy demands more of various commodities as it grows.

I'm generally not a fan of a nation-wide gold standard. That doesn't mean that you can't go and buy gold, however, and use it as a currency. I just don't think that locking monetary policy to an arbitrary commodity was ever that good of an idea. If people are worried about inflation then they are, of course, free to buy gold (or silver, or whatever) as they wish. And that is as it should be.

As for the history channel special... I'm not sure, but it might be related to:
http://www.history.com/content/money

Rabid,
LOL. No problem.. might be a little off-topic, but indeed it is a good discussion. A wealth of knowledge/ trivia u are sharing here... Keep 'em coming..
Thanks for that website too...


LasVahGoose,
appreciate your coming in here. I'm less familiar with the topic(s) than u are, so Thanks for sharing your thoughts..

I finished reading "Anatomy of the bear" by Russell Napier recently and it was an okay book. It goes over what the author thinks are the 4 biggest stock market crashes. 1921, 1932, 1949, 1982. He uses the 'q ratio' and some type of mean as to why he picked these specific dates.

It reads like a text book and is pretty dry, but interesting none-the-less. I'm not that well versed in economics or finance, so I didn't understand 100% of the material in the book, but I got the gist of it.

One of the things the Author does is look at news paper articles 2 weeks prior and 2 weeks past the official 'bottom' of the markets. It does break some myths and popular beliefs about crashes and calling the bottom. If this is topic you are interested in, it maybe a good read.

Here is something I noted from the book:

"The combination of large short position in conjunction with a market that does not decline on bad news was a positive indicator of a rebound in 1921, 1932, and 1949".

The potential underlying reason for the potency of the combination is what it signifies that everybody who can go short has already done so.

If you find yourself in

Las Vegas, give me buzz. We'll get few beers and continue the discussion. Just way to much to type...

Reminisces of a Stock Market Operator was a great read and some of the book covers what trading was like in that era. If one follows the history of the markets it's quite fascinating all the events that occured.

england33,
i'd like to have the illustrated version of that, hopefully soon



LasVahGoose,
Las vegas? poker?

hey, what about 1987???

Naa, no poker or another game for that matter... kind of boring huh?

>Apocalypto<,
probably 1987 is part of the "best" crashes list, rather than the worst list here.
seriously, let's wait for the more experienced answers.




LasVahGoose,
not really... at least i get to go to LV & meet traders like u --- that's worthwhile enough for me.
After our possible meeting, i'll then head off to a casino for some poker

up..........



For the sake of those who might be interested in this trivia (Post #1), i'll probably do this every 3-5months.