It wasn't exactly a fireside chat, but the scary language President Bush used undoubtedly reminded people of a time when the only thing we had to fear was fear itself.

"Without immediate action by Congress," Bush warned earlier this week, "America could slip into a financial panic... More banks could fail... and inaction could cause millions of layoffs, bank failures, business closures, lost retirement savings, more foreclosures, and a further drying up of credit."

And when he was finished his prime time speech one thing at least was perfectly clear: The ghost of the Great Depression had slipped into the room and the priest was in the hallway as the "goldilocks economy" took a dramatic turn for the worse.

Heck, even Jack Welch had changed his tune on his own economic outlook warning, "I now believe we are in for one hell of a deep downturn," adding that the first quarter of 2009 will likely be "brutal." Meanwhile, not to be outdone, Warren Buffet was also talking darkly about the prospect of an "economic Pearl Harbor."

That made for an early Halloween for investors, as the levels of market fear became more shrill with every failed negotiation.

The big question now, of course, is whether or not any of this scary language is accurate or whether it just makes for good copy and interesting headlines.

The problem with that though, is that economics isn't exactly our national strong suit. In fact, when it comes to the Great Depression, most of what people know about it is sketchy at best, falling somewhere between Black Tuesday and Smoot-Hawley.

Meanwhile, the fact is that the Great Depression itself wasn't defined by either event, but by scores of decisions both good and bad. As a result, the episode lasted over ten years and its different causes are still being argued about even to this day.

However, what manages to stick out from that great morass are the statistics themselves. And it's those numbers more than anything else that gives the slump its ultimate definition.

The Numbers Behind the Great Depression

So is the U.S. really headed for another Great Depression... if we don't give Congress a blank check to bail it all out?

Well, let's hope not. Because the numbers from the first one are so off the charts that they make it almost impossible to comprehend a second one.

Consider these facts:

• From 1929 to 1933, production at the nation's factories, mines and utilities fell by 50%
• Real disposable income fell by 28%
• Stock prices fell by 90%
• The number of unemployed rose from 1.6 million in 1929 to 12.8 million in 1933
• At its worst, 1 in 4 workers nationally were out of work
• Auto production fell 75% from its 1929 peak
• Nine thousand banks failed between 1930 and 1933

And it was only after 10 years of stumbling and bumbling through that tangle that the economy finally began to rebound for good.

Kind of hard to fathom, isn't it?

So, by comparison, at this point, there really is none and it's doubtful that there ever will be — all fear mongering aside.

Nonetheless, there are certainly more than enough similarities between these two events to make you wonder exactly what lies ahead. Here are few of them.

The Depression's Ben Bernanke

They come to us courtesy of Marriner S. Eccles, the Chairman of the Federal Reserve from 1934 1948 — think of him as the Ben Bernanke of his day.

In his 1951 memoir Beckoning Frontiers, Eccles detailed what he believed caused the Depression.

Eccles wrote:

"As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth — not of existing wealth, but of wealth as it is currently produced — to provide men with buying power equal to the amount of goods and services offered by the nations economic machinery. [Emphasis in original.]

Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth. This served them as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied to themselves the kind of effective demand for their products that would justify a reinvestment of their capital accumulations in new plants. In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.

That is what happened to us in the twenties. We sustained high levels of employment in that period with the aid of an exceptional expansion of debt outside of the banking system. This debt was provided by the large growth of business savings as well as savings by individuals, particularly in the upper-income groups where taxes were relatively low. Private debt outside of the banking system increased about fifty per cent. This debt, which was at high interest rates, largely took the form of mortgage debt on housing, office, and hotel structures, consumer installment debt, brokers' loans, and foreign debt. The stimulation to spending by debt-creation of this sort was short-lived and could not be counted on to sustain high levels of employment for long periods of time. Had there been a better distribution of the current income from the national product — in other words, had there been less savings by business and the higher-income groups and more income in the lower groups — we should have had far greater stability in our economy. Had the six billion dollars, for instance, that were loaned by corporations and wealthy individuals for stock-market speculation been distributed to the public as lower prices or higher wages and with less profits to the corporations and the well-to-do, it would have prevented or greatly moderated the economic collapse that began at the end of 1929.

The time came when there were no more poker chips to be loaned on credit. Debtors thereupon were forced to curtail their consumption in an effort to create a margin that could be applied to the reduction of outstanding debts. This naturally reduced the demand for goods of all kinds and brought on what seemed to be overproduction, but was in reality underconsumption when judged in terms of the real world instead of the money world. This, in turn, brought about a fall in prices and employment.

Unemployment further decreased the consumption of goods, which further increased unemployment, thus closing the circle in a continuing decline of prices. Earnings began to disappear, requiring economies of all kinds in the wages, salaries, and time of those employed. And thus again the vicious circle of deflation was closed until one third of the entire working population was unemployed, with our national income reduced by fifty per cent, and with the aggregate debt burden greater than ever before, not in dollars, but measured by current values and income that represented the ability to pay. Fixed charges, such as taxes, railroad and other utility rates, insurance and interest charges, clung close to the 1929 level and required such a portion of the national income to meet them that the amount left for consumption of goods was not sufficient to support the population.

This then, was my reading of what brought on the depression."

Now does any of that sound familiar? You bet it does.

But does that mean we are actually headed for a repeat of the Depression?

Of course not. No two historical events are exactly alike and ours is a story that is still being written.

Even so, you can't help but believe that some sort of pain is going to be found somewhere in our current tale. However, in all likelihood it will be much closer to what Jack Welch described yesterday, not in a return to apples and boxes to sell them in.

For investors, however, that means looking beyond the fear to the future. Because as this crisis begins to clear — and it eventually must — it will represent one of the greatest buying opportunities of all time for those of you that managed to keep your heads.

That much I'm sure of.

And if you don't believe me, just ask Warren Buffett about it.

He sunk $5 billion into Goldman Sachs on the very day the President conjured up the ghost of Tom Joad.

And as an investor, I'd be willing to follow him anywhere — even past the graveyard on the darkest of nights.

By the way, here's something else you need to know about the Great Depression. The stock market bottomed long before the crisis itself ended. Stocks actually bottomed in July 1932 before the next uptrend began. That was long before FDR took office and delivered his first fireside chat.

Food for thought.

Your bargain-hunting analyst,

Steve Christ, Investment Director

The Wealth Advisory

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