Worse than the Great Depression.

The mainstream media and Wall Street have reached the consensus that the current credit crisis is the worst since the post-war period. George Soros’ statement that ”the world faces the worst finance crisis since WWII” epitomizes the collective wisdom. The crisis is currently the ultimate scapegoat for all the economic evils that currently plague the global financial system and the global economy – from collapsing stock markets of the world to food shortages in third world counties. We are repeatedly assured that the ultimate fault lies with the Credit Crisis itself; if there were no Credit Crisis, all of these terrible things would never have happened in the economy and the financial markets.

The most extraordinary thing is that the mainstream media has never attempted to compare the current economic environment to the one preceding the Great Depression. In essence, it is assumed outright that the Great Depression can never possibly happen again, ever, thus obviating the need for such a comparison. I actually believe that the macroeconomic fundamentals today are much worse, so that we are in for a protracted period of economic depression – a depression much worse than the Great Depression, a depression that would likely be remembered in history as “The Second Great Depression” or The Greater Depression, as Doug Casey has called it so aptly. Here is why I believe that this is the case.

www.globalresearch.ca...

A "Great Depression" today would be far worse if occuring today, especially considering how interlocked the world is today, the entire planet would be heavily affected...

I am by no means an expert on the great depression but there are a few things that will in my mind make the economic crunch this time around possible much worse then the " great depression "

1. People have a much greater personal debt load then we saw in the great depression
2. The county also has a much greater debt load then we did during great depression
3. Much of our manufacturing jobs have been shipped over seas
4. A good chunk of the population has little or no savings
5. People of todays world have a different mentality , we are the me generation and want things right away .

Taking those few factors into consideration I can definitely see things being equally bad , if not worse then we saw during the great depression.

reply to post by Grock

It was staged and it was made to happen, and it was verified by
warren buffet the big time billionaire.

&print=true&dist=pr intTop]100's of Trillions in derivatives set to collapse

This is all I need to know about the giant theft that has been taking
place for some time now.

We are somewhere between Kleptocracy and Plutocracy.

Good Luck to you all !

Asset Bubbles – first in the stock market during the 1990s, then in real estate during the 2000s, pretty much mirroring the stock and real estate market bubbles of the 1920s.

Securitization – although not in the very “ultra-modernistic” form and shape of the 2000s, with slicing and dicing of pools and tranches of seniority, it was widely recognized in the 1930s that securitization during the 20s drove the domino effect in the U.S. financial system during the Great Depression.

Excessive Leverage – just like in 2008 the topic du jour is “deleveraging”, so the unwinding of leverage during the 1930s was the driver of forced liquidations and financial pain. Of course, it was very clear back then that the root of the problem was not deleveraging per se, but the excessive leverage that took place prior to the deleveraging process. “Investment Pools” were then instrumental in both the securitization and excessive leverage, just like the Hedge Funds of today.

Corrupt Gatekeepers – we know well that the Enrons and Worldcoms were aided and abetted by the accounting firms – those same firms that were supposedly the Gatekeepers of the financial community, yet handsomely profited from the boom while neglecting their watchdog functions. In the current financial crisis, we also know that the rating agencies were also making hay during the boom. Very similar were the issues during the 1920s that led to the establishment of the SEC and other regulatory bodies to replace the malfunctioning “gatekeepers” at the time.

Financial Engineering – we are led to believe that financial engineering is a rather recent phenomenon that flourished during the New Age Finance Era of the last 15 years, yet financial engineering was prevalent in the 1920s with very clear goals: (1) to evade restrictive regulations, (2) to increase leverage, and (3) to remove liabilities from the books, all too familiar to all of us today.

Lagging Regulations – just like the regulatory environment lagged the events of the 1920s and regulations were introduced only after the Great Depression had obliterated the U.S. financial system, so we are yet to see new regulations addressing the causes of the current crisis. Understandably, regulations should have foreseen today’s financial problems and should have been introduced before the crisis.

Market Ideology – back in the 1920s, just like in the last two decades, the market ideology of “laissez faire”, which Soros quite appropriately described as “Market Fundamentalism”, has swept the financial markets. Of course, the free market knows the best, but the reality is that the money market is not really free – when the Fed determines the cost of money (interest rates), and can fix this cost for as long as it wants, then all sorts of financial imbalances can be sustained without the discipline imposed by the market. This can lead to all sorts of problems that we actually have to face today.

Non-Transparency – back in the 1930s, it was widely recognized that businesses and especially financial institutions lacked transparency, which allowed for the accumulation of significant imbalances and abuses. Today, financial markets and institutions have intentionally compromised transparency in a number of ingenious, or better disingenuous, accounting trickeries and financial gimmicks, like off-balance-sheet entities (SIVs), hard-to-understand derivatives, and opaque instruments with mind-boggling complexity. Today CEOs and Chief Risk Officers of major financial institutions cannot figure out their own risk exposures. Originally, lack of transparency was designed to fool the markets; ironically, modern-day financial executives have gotten to the point of fooling themselves.

I like "GD 2.0" in lieu of "Second Great Depression" or "Greater Depression".

reply to post by Grock

Much more detailed post than mine.

A lot of good info there, Star for you !

I still think that Marketwatch article needs to be required reading
just for the fact that ppl knew at least one year ago a disaster
was looming and it has yet to really collapse.

1. People have a much greater personal debt load then we saw in the great depression
2. The county also has a much greater debt load then we did during great depression
3. Much of our manufacturing jobs have been shipped over seas
4. A good chunk of the population has little or no savings
5. People of todays world have a different mentality , we are the me generation and want things right away .



Let me add a couple more......

6. In the 30's, most people worked on farms, those who left the farm, went back.
7. People new how to survive, Hunting, fishing, gardening, self sufficent.

8.People were more spiritual, moral.

9.The GD was worse and longer in the US as opposed to other countries
because of our Gov't intervention.

I'm paraphrasing alot from Gerald Celente.....

can I add scapegoating to your list....
over the last past couple of decades, I've noticed alot of it going on, this group, or that one, being presented in a very negative light with the message that they really shouldn't be enjoying the same basic human rights as the rest.

germany used the same tactic to gain at least enough approval from the majority of the german people to haul away a rather large portion of their members in mass....
which freed up jobs, which freed up resources, all of which left those remaining able to live a tolerable lifestyle.

as things get worse, don't for a second think that there won't be alot of support from those who think they will not be one of those unlucky few to do such things again. proverty is rather ugly when it's living down the street from you, much better to round it all up and seclude it somewhere out of view, how else I am to enjoy my t-bone steak dinner with red wine!