Jonock's Blog : How low will it go?

All of the factors have been slowly growing over our lifetimes, blatent market manipulations and subtle invisible tweaks by governments. The invention of new riskier investment vehicles in which to put our money. The encouragement of consumers to live far beyond their means with massive debt loads.

We have grown accustomed to "bigger" and "better" as an expected way of life. So when our bubble popped why wouldn't our drop be the "biggest" drop ever?. Since the creation of the Dow Jones industrial average back in 1896 the largest ever one day "point" drop that has ever occurred was on September 29, 2008 the DOW plummeted from 11,143.13 to 10,365.45, a drop of 777.68 points or 6.98%.

But is that it? I think not, we still have much "bigger" records in our future. Records will always be broken, both up and down. But we must remember the basic laws of Applied Austrian economics still applly to todays markets.

Murray N. Rothbard's "America's Great Depression" is a staple of modern economic literature and would make great light reading over the Christmas holidays. Chapter eight will give you a preview of 2009.