Our current economy is facing unique circumstances. In no time in our past have we had such a large number of American retiring and living many years post-work. Average life expectancy in 1900 for a male was 46 and today it is up to 73 (for females it is 48 and 79 respectively). The baby boomer generation will draw on retirement plans, pensions, and Social Security. It is also the case that we have never had a housing market like the one we face today. Never had we had such a widespread bubble and we have never had a market where shadow inventory is actually larger than normal inventory.
That is actually where we stand on housing as of this moment. It is also the case that we have never gone through such a painful crash without any serious reform to fix the system. Nothing has changed and this is the biggest financial crisis since the Great Depression. Speaking of the Great Depression let us walk through significant events over the 1920s and 1930s and see if we can learn any lessons for our current economic predicament.
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