Don't Be Fooled, It Will Be a Depression!

I have a degree in history and one of the great sayings is, "history repeats itself." The best way to gauge how bad things are, and how bad they could get, is by analyzing the situations in history that are most similar, for there, you can find some clarity. We are going into a depression at the very least, and at this point, I do not see anything stopping this. Below are the reasons for my beliefs (and I have held them for some time).

1. Just like the roaring 20's, the 1990's and 2000's have seen an unbelievable surge in available credit and the virtual disappearance of any lending standards.

2. Personal, commercial, and government debt is at amounts that are virtually impossible to even comprehend and will never be paid back.

3. Commodities were inflated to historical levels at the early part of this century due to easy credit and overconsumption, and have now fallen off the cliff showing the realization that there is no need to produce, because within the next 12-18 months there will be little, to no consumption.

4. The trade deficit continues to grow as we export less and consume, consume, and consume some more. Eventually, our creditors in the world are going to wake up and realize that we can never pay them back.

5. This point is most disheartening; due to the disparity between consumption and production, we lack the vehicle to repair and sustain ourselves...industry! Once our creditors stop financing our consumption, we will find ourselves in an environment far worse than the Great Depression. When the world cannot sustain our consumption and we cannot provide for it ourselves through industry and production, we will reach a situation of unheard of horror.

To see some great historical comparisons, check out the link and make a mental note of the similarities to our current situation. We are on a collision course not just for a depression, but a complete breakdown of the world we know.

1929 or 2008?

Generally only employed people generate wealth for our economy. Lets say that 5% are employed "under the table". So there are 136M workers + 5% = 143M workers. Only workers are able to pay off debts obviously. So what is the debt load per worker? Well, it is commonly cited that the total debts of the US, including public, corporate, personal, etc debts is about 50 TRILLION dollars. This means that every single working American is supporting a debt burden of $349,650. So yes there is potential for hardship like the great depression. But I think you tend to underestimate just how bad the great depression actually was. It was a very tragic time period where life was a truly harsh thing for most Americans. So you are saying a lot to say it will be actually worse than that. I do think you may be right though, and I'll certainly be planning accordingly.

Sources:
www.bls.gov...
www.mybudget360.com...

Edit: I should add that the numbers are worse than they appear. In the US, much of the work is counted as employment where in other countries and in older times in the US, it was not counted as employment. Firstly, there are many mothers who work. Secondly, employment of teenagers having part-time jobs may be higher than in past generations. Thirdly, we have a lot of jobs which are done in paid positions that used to be done off the record. Namely, a lot of cooking and cleaning is done on the record. If you eat fast food, that cooking time by fast-food employees is on the record. In the "olden days" such jobs would not be counted because there was a lot more cooking done at home and therefore it would not be counted as employment.

[edit on 11-12-2008 by truthquest]

All part of the larger 2012 phenomenon.

Happy End of the World 2ya!

the problem is that we worldwide are not only facing one crises which historically has been enough to destablise things - we are facing four major issues at the same time which has not happened at this scale as far as i can see in history. Namely:

1. the financial meltdown
2. the environmental meltdown
3. the shift of power (political, social, economic, etc) to the global stage
4. the shift of power away from the individual and onto the infrastructure and social system set up by our governments.

In the past we have seen one crises or many localised mini crises manifest at one time. at present we have four BIG one's without any recourse and they seem to be spiraling out of control.

To illustrate what i mean, have a look at point 3. We are seeing all power being shifted on the global stage - everything from healthcare to terrorism. The fact remains that over centuries individual states have tightened their individual laws to ensure that there is sufficient regulation available for almost all scenarios. Now we are entering a scenario where local legislation does little as a punitive recourse and regulations which do exist at the international level are grey at the very least. Even the 'non grey' laws are subject to a lot of disregard by certain states making their real life application very difficult. This alone would have caused turmoil at an unprecedented scale... but this coupled with the fact (point 4) that we are so used to relying on the system and processes around us that society will probably find it hard to survive if the grid no longer works.

I mean, we want electricity we call the energy provider. We need heat then we call the natural gas company or buy an electric heater. We need food, we go to the supermarket. We need justice, we call the cops. we need to go see our Mum, we get into a car that uses petrol. We are no longer isolated and have the necessary basic survival knowledge that normally would have been passed down to individuals from the older members of a society. Imagine the consequences of breakdown in the electricity supply, mass unemployment, homelessness, and lack of property. where are the people going to go to in order to get shelter and acquire a piece of land to grow their vegies... ???

unfortunately for a lot of us awareness of the issues has come too late.

[edit on 12/12/08 by 04326]