This Chart Lines Up Eerily With 1929, Great Depression Coming?

[00:00:08][music] Hey folks, welcome to verifiedinvesting.com.

[00:00:14]My name is Gareth Soloway, chief market strategist here. Now, in today's video, we're going to go into a more somber topic about the 100red-year cycle and whether or not we are looking at another great depression coming in the next few years. Now, let's be fair, really 1929, so we're looking at 2029. So, we still potentially have about 3 to four years to go before this hits. But I think it's important to look at the similarities and how, you know, basically when I grew up, I always heard about how every generation has to experience or or there has to be a living generation that experiences the Great Depression. And I know my grandparents who went through it have passed away now. And there's very few left out there that went through the 1929 crash and the 1930s depression. And so we're getting to this point where us as humans have forgot about the lessons that were learned, the risktaking, the manipulation, all of it coming full circle. And I went and did some research on the similarities. And it is strikingly scary. Now listen, just because we're looking at a great depression potentially, and I say potentially because we don't know for sure, but potentially in about 3 to four years, doesn't mean the markets are going to go up non-stop. I still think we'll get 20 30% corrections because that's just the norm of any market, right? But we see how the manipulation has unfolded, the Federal Reserve's involvement, the government spending, which we know can't go on forever before that has to be pulled back. We've seen these AI transformative type things that are very similar to what went on in the roaring 20s. But in any case, as always, I want to get right into it, guys, and take a look. So, we're going to look at this graph I created or this this visual so that we can really get our heads around this. And these are all bullets that are similar. All right? They have very strange similarities. And so, the first one we have to look at is the post-pandemic boom. Both eras were cat catalyzed by the end of a global pandemic. In the late teens of 19, you know, 15 to 17. We had the Spanish flu.

[00:02:30]COVID 19 hit in 2020. This led to a major pent-up demand and market euphoria. Next, we have transformative technologies. The 20s rode the wave of mass electrification and automobiles.

[00:02:45]Think about the difference, right? If we think about how different the 19, you know, early 1900s were from the 1920s.

[00:02:54]All of a sudden, people didn't have to light candles in their houses. They had electricity. I mean that was I mean you could actually work at night versus before that you know production had to cease. You had factories coming on. You had the major assembly lines with automobiles. People could then travel.

[00:03:14]It wasn't like we were just kept in our one town where we were born. We could actually start to drive without riding a horse. Right. Huge huge difference there. And here in this day and age what do we have? where we have this huge um artificial intelligence change, cloud infrastructure. Obviously, we even went through the internet age and that's accelerated here as well. All connected potentially even going into the space age with the Space X IPO. The next one is the gamblification of markets. The 1920s saw retail speculation explode through bucket shops and highly leveraged margin loans that treated the ticker tape like a horse track. Today that casino mentality is digitized through the massive volume of zeroday options as well as prediction platforms like Poly Market and Khi. And this essentially divorces participants from the business fundamentals amplifying the market fragility. Next, we have elite weaponization of information. Back in the 20s, there were pool operators. They planted fake stories. Today's elites use platforms like Truth Social and direct to consumer media pump narratives like X to push narratives. All right? They push the bullishness. They push the dream.

[00:04:35]They sell the dream. And you could go through any amount of elites or government officials who are doing this.

[00:04:42]And we see this with these V-shaped recoveries, right? Not only is there massive amount of money that retail has now been suckered into just continually coming in, but we're now seeing it through, you know, every time there's a down day in the markets, we see a truth social post about a deal with Intel and Apple or, oh, we have a new deal with Iran and it's even better or whatever it is. This happens over and over and over again. Incredible stuff, guys. Uh, next we have circular deal architecture. The 1920s, utility holding companies bought and sold shares internally to create fake growth. Today's mega cap tech firms firms invest billions in AI startups that immediately route the money back to parent companies to buy cloud computing, creating synthetic, and they're and they're buying the chips too, right?

[00:05:34]they're buying, you know, we've seen this with AMD and Nvidia and Open AAI and I mean it's it's basically a circle of money where I buy your shares, you buy my chips type type of thing, right?

[00:05:45]And this is exactly in many ways what was going on back then. Obviously on a different scale because the technology wasn't there, but it was all going on then. All right, insider access and fund functional impunity. Pre-1929 markets lacked an SEC entirely. Today's market features do have a regulatory apparatus that selectively enforces these rules, right? But they penalize retail while looking the other way when lawmakers and elites execute perfectly timed mega trades ahead of the news. All right? And again, oftentimes this is fabricated news, right? It's just the same thing again. It's saying, "Oh, things have gotten really bad." And then all of a sudden you see a hundred million dollar futures trade. And then news comes out about that same thing, but in a positive light. And this is something that now we're seeing more and more. And while in the 20s you didn't have the SEC, today you could argue that do we really have an SEC? Because they're certainly not going after any of the elites or these other players, right? And so again, very similar. Very, very similar. Just a couple more here, then we're going to get into some chart action, guys. But basically, the next one is retail euphoria and access. The 20s saw the public flood into the market via street level brokerage offices. Today, zero commission apps have turned retail into the primary exit liquidity for the elites who drive the initial momentum.

[00:07:12]And again, so many retail I mean, there there's almost no one that doesn't have a small account. You can buy partial shares now. um the day trading rule for $25,000 went away. All of these things are being done to increase everyone's participation.

[00:07:30]In addition, another one, it's not even on this list, but the market cap toward to GDP in the 20s, in the late 20s, it exceeded substantially the GDP of the US. Guess what? The market cap now of the stock market is way at up above.

[00:07:48]It's like 2x at least the GDP of the US now as well. Um, last one I want to just bring up to you. Extreme market concentration. This is a huge one guys and we see it so much. We know 40 the top 10 to 15 AI related stocks account for 40% of the total market cap of the stock market. And and you can see here both decades feature headline indices.

[00:08:12]Dow the Dow Jones then now it's more the Nasdaq or S&P kept at historic highs by a hyper centric concentrated handful of megga cap leaders masking the structural weakness of the average stock below and that's exactly what we're seeing today right we know that if you took out the gains of the mega players the AI names the stock market this year would probably be flat to down we know that the advanced decline has been exceptionally weak there are many more stocks than in a usual bull market that are below their 50 and 200 daily moving averages while a few stocks go parabolic. So again guys, listen, I want to be clear.

[00:08:54]I'm a big believer in preparedness, prepping, in other words. And while I think that this great depression, there's enough capex from the the mega caps to keep the engine running with the Federal Reserve's help and the US government spending to drive us to essentially get to a point where um if this doesn't happen for years, but at some point it's going to happen. And my guess is that hundredyear cycle, the hundredyear cycle, that is when it's going to happen. and it's all going to come crumbling down. All right, let's go to some charts here, guys, because again, the charts are key. If we flip over here and we take a look at the Dow Jones Industrial Average, now I'm looking at this specifically because it goes back to the 1920s.

[00:09:44]This is your regular chart just going back to 2009. The Dow in 2009 was 66 666 basically. Think about that. That was the low in 2009 on the Dow 666. Um, in any case, up it goes and we're now at 52,000. Now, keep in mind, I actually think it could go higher before we finally have that thing. Now, it doesn't mean we're not going to have pullbacks of 10 or 20% or even 30% like we've had, but what I want to do now is if we zoom out, the only way we can do this and go back and chart it is by going to the logarithmic chart here. Now, what's so freaky about this is if we go to the logarithmic chart here, we have a parallel right here. Okay? Now, that's important in my humble opinion because what we see is that occasionally we pierce this parallel before great collapses or bottoms. And so, here what we have folks is a parallel channel, right? And so, what we can see is you have a pivot low. So here's your your great just before the financial collapse the 1929 crash we pierced the upper band of it here when we bottomed out in the great depression we pierced the lower end. You can see just before bull markets we get a pierce here before a big massive rally there. Here we touched the high in the 2000.com and had the big pullback. Then we kind of double topped there and then look at this. We are now above this range. And so to me, when I look back and I say, "Wow, the last time we were this much above or below, it was just before a massive bounce in the market before the Great Depression." It puts me in a warning zone on the logarithmic chart. I mean, it's really remarkable here, folks. Trying to do this exactly as possible right to that high right there. Goes right through here. And then look how we got above it.

[00:11:38]We came back in just below it, but then we got above it. Then we came kind of kissed it. and we continue to push up.

[00:11:43]Now, again, if I'm correct, we could have more pullbacks along the way, but inevitably we probably go higher for another few years until we get that massive move to the downside. And this is what I'm worried about, folks. With the similarities discussed, how do you not be a little bit concerned? I mean, think about it. Even, you know, we even talked about the underlying participation of stocks and how a lot of stocks are not participating. It's really the AI stocks and the ancillary plays around the AI narrative. Um, but what we also see is that you have exactly what was going on in the 20s, right? Where you had there there was kind of the middle upper income that were investing and making fortunes and then this divergence between the ultra wealthy, right? People that were getting ridiculously wealthy in the stock market and then you had people that were like living on the streets, right? And you have that same dynamic here as well. And a couple other things that I want to just point out is that if we look at the run in the 20s, right? So we look at this run in the 1920s and we do a measurement of date range, right? So we do from 1929, right? To the high here, it was just under 3,000 days. Okay? Now remember, right over here was the Spanish flu and we had right over here uh we got to go further here. This is where we had the COVID collapse, right? And so you can see that's when the bull market began and right after the Spanish flu and right after the COVID collapse. Now if we use that same mentality and we say, okay, approximately 3,000 days, right? We look at this and we say, okay, well, what about from from this point? And this would show me from 09.

[00:13:33]So COVID was right here and I apologize.

[00:13:34]So COVID. So we want to do that same measurement from the COVID, right? So essentially here's the Spanish flu, you know, the whole ending there and the bull market begins and that's 30,000.

[00:13:44]And so we go and do that same measurement from 19 from 2020, which was the COVID low. All right, we do a date range here and we bring it up. And look, we're only at 2,200. And so what's even freakier here is if we expand this out, when do we get to that same 29 to 30,000? Let's go here. Okay, right here.

[00:14:07]This is when markets would be aligned approximately, right? Right in here in 2028 July. So that would give us a top in around late mid to late 2028 going into 2029 which would then equal this 1929 high which happened to be in July by the way which is a little freaky that this would be July June July of 2028. That would be 99 years coming into the 100redyear cycle. You guys see that? So again, 29 and again, this is off by a couple days, but basically 2900 to 3,000. And that would put us out to approximately right here. Let's go back and do it right there. And approximately right in here into 2028. And then you have the 2029 high. And these are the things again, folks, you might call me a nut job. That's okay. That's what I do.

[00:14:57]Um, this is how I find this stuff and it fascinates me. And I'm always very aware that it may not pan out, right? Right? I mean, there's always a chance. I mean, you could say, "Hey, listen. The government can print money forever." But at some point, if you think about it, the debt of the US is going to matter at some point. We don't know when, but if we're adding 4 trillion right now in debt per year, which is approximately what we're adding, and interest payments are going to go up. So, it'll probably be, you know, this year four trillion, next year five, then six, then seven. By the time we get to 2028, 2029, we're at 60 trillion.

[00:15:33]60 maybe maybe even more 60 65 trillion in debt and what happens when the AI capex spend which is propping up the market starts to come down because they have to at some point make money they just can't keep spending more and more and so you have this stimulus of government spending and capex from these AI players that continues to kind of fuel part of the economy keeping us afloat. What happens when both of those, imagine if both of those in 1929 to 1930, both of those, all of a sudden austerity is imposed by other countries not willing to buy our debt. Oh my gosh.

[00:16:08]And then capex comes down. That's where your great depression comes in. All right. And again, I'm not meaning to spend to spread FUD, fear, right? It's more just a very intriguing analysis of what is going on. All right?

[00:16:23]And what could be coming our way. And don't forget guys, later today or maybe tomorrow, maybe I'll do it Sunday, maybe Sunday, I will release a membersonly video deep dive unique just to my members here on Gareth's Top Squad, which is my YouTube membership. $9.99 a month. It's a way for you to support my channel. Um, remember I have over 15 employees here that are all working, getting me information, working to help me do the best we can. We have traders out there that are trading that are helping our members as well at verified investing and it's a way for you to support us. But also I drop major alpha and don't forget I next week by late next week I hope to drop my first discount code just for you here on YouTube. All right, I got to get going guys. Thank you so much. I hope you found this this video intriguing. I find this stuff fascinating. I'll keep you guys posted, of course. Take care.