Do you think we will ever have another 1930's type Great Depression?

[MN Patriot]

The Great Depression in the 1930's is the ultimate standard of how terribly wrong our economy could go. Some people talk like it could happen again. Do you think we will ever see 25% unemployment, bread lines, massive poverty? Or will our technological advancements prevent that from happening again?

 

[Truth Warrior]

Yes, only worse the next time.<IMHO>

 

[Johnnybags]

You are getting an inflation depression

The Great Depression in the 1930's is the ultimate standard of how terribly wrong our economy could go. Some people talk like it could happen again. Do you think we will ever see 25% unemployment, bread lines, massive poverty? Or will our technological advancements prevent that from happening again?

instead where you lose 7 - 15 percent a year in buying power. The politicians will handout useless dollars as long as they are in power, the welfcare checks while the economy is in supposed expansion should tell you that Washington and the FED are going to devalue your purchasing power for the foreseeable future. So its more of a rapid decline in living standards than a typical depression. That is costs for necessities will soar. Look at a rice futures chart for an example. Conversely, wage growth will be weak and housing weak as well. Commercial real estate will weaken rapidly. Consumption will weaken dramatically and unemployment will be in double digits, it already is, but they do not count those that fall off the rolls, thats why they do not want extended unemployment benefits.

 

[Truth Warrior]

One scenario, for example:

http://www.thegreatbustahead.com/
http://www.thegreatbustahead.com/pi_article_feb2004.pdf

 

[tod evans]

my uneducated opinion is that due to the fact that we as a country produce a very small percentage of tangable goods when compared to the 1930`s we could very well be in for a much worse time.
our nation shifted to supporting ourselves with paper jobs in the late 60`s when american companys started looking for bigger profits via cheap labor.
untill we are able to provide for ourselves again we`ll be dependant on foreign countrys to decide what our tangible goods will cost and we`re not ready to give up our "stuff"...
in the 60`s even there was no need for "made in the usa" signs.....today you can`t even believe the few signs that you can find, the small print usually includes something along the lines of "packaged in the usa of parts manufactured in india and assembled in china"
restoring the american economy is going to be a long and painfull process but if we`re to remain "the united states of america" we`d best get on with it before it`s to late.
tod

 

[Pete]

my uneducated opinion is that due to the fact that we as a country produce a very small percentage of tangable goods when compared to the 1930`s we could very well be in for a much worse time.

Before WWII, many Americans were supported by farming (50% IIRC), plus we supplied all our own manufacturing needs as you point out.

Yes, our economy is a giant fluffball, selling cell phones, insurance, and all kinds of useless shit to each other that when the chips are down we can do without.

I'm concerned. Not worried because that's a wasting position, but concerned.

 

[DaneKirk]

From what I understand things are gonna have to be MUCH worse before it ever gets that bad. On Fox news a week or so ago there was a CEO from a capital investment firm that said we as Americans have been on a binge for a long time fiscally and we are about to have a national hangover. Time for us to learn from our mistakes and come out stronger when the bear market ends, who knows if that will happen though.

 

[Lyn]

Not only do I believe that a depression is a great possibility in our future, but I think this time around we will also have to deal with the added horror of a true police state. The writing is on the wall with the escalating trend toward government destroying civil liberties and freedom. The sheeple are buying the whole propaganda about how the government is trying to save us from ourselves. Day by day I see the eroding of what this country was founded on and the frogs are sitting in the pot smiling happily with their rebate checks while the government slowly turns up the heat. Merge the growing trend toward fascism with a financial collapse and I don't even want to imagine how bad things will get. Of course, this scenario has less probability if we can get everyone to wake up and start electing Ron Paul Candidates.

 

[tsetsefly]

I dont think so. The US economy is too diversified now, and even in a severe recession. There are still services offered here that no other country can provide.

Also the great depression was caused by hoover's and FDR's policies, I dont think the same policies would be implemented, but if they are, then we most likely woudl see another great depression.

 

[Ernest]

I agree with you Pete.

In addition many people today don't know how to do much except manipulate data and information. We have become a much, much more dependent society. As a kid I remember we rarely called someone to fix anything. My dad or neighbors did it. Partly as a result of the depression and cost conscience but mainly because it provides independence, & freedom. I don't EVER want to be dependent on the federal government except for thier Constitutional duties. Control needs to come down. Katrina would have been 100%+ better if things were from the ground up instead of top down. We must reverse that if we are to survive. Our strength comes from being dependant on ourselves. We were sold on the idea that "information" is king. We are to be a "service" economy. We would sell our breadbasket; Our manufacturing and farming. Dollars would fall from heaven as we become the service king. Along with the idea of a "global" economy except thier idea of global is to become one not as trading entities and sovereign nations. All this globalism also works to further alienate us to one another as America becomes just a piece of geography and a consumer section.

I am concerned too.

 

[davver]

A depression is of course inevitable. Economic laws haven't been repealed. The question has always been when. This year, next year, ten years from now, thirty years from now?

 

[jkm1864]

Try to sell You're house right now.... You can't well guess what that should answer You're question. The American people have been spending way to much with the credit cards and the loans. I know my old lady Fuc&ed me royaly with credit cards and I think credit cards are evil. Alot of americans are in the same boat and even though I make decent money I am able to pay for the credit I know alot of people are not. We have had homes on the market around my area for well over a year and no buyers. I had to get a loan the other day and I could only use 95% of the value of my home. I had my home appraised the other day and I have not gained any equity what soever in the last 5 years and to be honest I am loosing my butt with paying extra every month. The value was 160 when I bought it and its valued at 160 now. I am not even figuring in inflation and if I do that then its probably only about 120K which I currently owe on it. I wish my old lady wasn't so foolish because I should just foreclose on it and move into a shack.

 

[jonahtrainer]

The Great Depression in the 1930's is the ultimate standard of how terribly wrong our economy could go. Some people talk like it could happen again. Do you think we will ever see 25% unemployment, bread lines, massive poverty? Or will our technological advancements prevent that from happening again?

We are already in the middle of Great Depression II. It is only going to keep getting worse. See some charts/graphs from RunToGold.com. Gold is the risk-free rate.

 

[Kregener]

I voted "No".

Because the coming financial tsunami will be to the Depression what an IRS audit is to being $10 short at the register....

 

[thuja]

I voted "No".

Because the coming financial tsunami will be to the Depression what an IRS audit is to being $10 short at the register....

i do hope you are correct. i voted no as well.

 

[EvilNight]

Frankly, I doubt this entire scenario.

Not that we will have a depression (or at least, a seemingly eternal bear market). That seems pretty inescapable. It may even be possible that we have an actual crash.

What people are not taking into account is the change in access to information. How many of you survivalist types have a printed edition of Wikipedia ready to go? Have you at least put it (and other valuable information resources) on DVDs or CDs? Do you have survivalist information, tips on farming, how to produce, how to repair, how to do basic carpentry, etc? If no, why the hell not? All of that stuff is out there for free, for everyone.

Given the access to information, I expect a rebound that redefines the realm of what is possible, even if we have genuine deflation and end up back on barter systems. The information that was once so hard to come by can now fit on a single DVD, and that itself may become a valuable commodity for a time.

Any survival kit ought to include a very low-power use computer system, and all of the reference materials we have all come to depend on every day on the internet. Access to this information will greatly blunt the blow of any financial crash and hasten its recovery.

 

[AceNZ]

i do hope you are correct. i voted no as well.

Why would you hope for a scenario that's an order of magnitude worse than the Great Depression? Are you insane? Or maybe you just misunderstood his comment?

Because the coming financial tsunami will be to the Depression what an IRS audit is to being $10 short at the register....

 

[AceNZ]

The information that was once so hard to come by can now fit on a single DVD, and that itself may become a valuable commodity for a time.

Does Wikipedia make it possible to download and clone the entire encyclopedia? If you have any info about that, I'd like to know more.

Do you know of anyone who has gone to the effort of capturing important parts of the web on a DVD, or are you thinking of a do-it-yourself project?

 

[MN Patriot]

Thanks for your input everyone.

Personally, I cannot imagine the economy undergoing a depression like the 1930's. Here are several reasons why:
-The modern industrial revolution was really only about 30 years old, manufacturing and technology was still primitive compared to today. We can produce much more with less; technological advancement will ensure there will always be enough "things" available, such as food, clothes, the basic neccesities.
-The nation's infrastructure was still primative. Roads were knee deep in mud, much of the country didn't have electricity. Railroads were probably at their peak around this time, but they have declined dramatically, replaced with autos, trucks, airplanes.
-Communication was slow. Snail mail was the norm. Some people had phones. No TV. Radio powered with batteries.
- The Federal Reserve learned its lesson, don't contract the money supply. Enough of us understand why it happened (but sadly too many still don't, they blame the "market"). If they try the same thing again enough people will be able to call them on it.

There are still many things to be concerned about. We are probably breaking new ground with our massive debt. Even though our monetary system could collapse, people won't curl up in a corner and do nothing. People will find ways to meet their needs.

Of course a worldwide natural disaster could really mess things up enough to stop the economic engine. Global warming that caused oceans to rise 20 feet like Al Gore continually shrieks about could do it. Or global cooling that would destroy most of our crops could do it. Or an astroid. Or an epidemic. Or an all out nuclear war.

Anyway, I don't share the dire outlook that most people have. I have confidence that one way or another people will muddle through without a drastic economic downturn. The Establishment (banks, big business, big government) have figured out how to run the economy to their advantage, and to keep the masses preoccupied with trivial nonsense while bilking them with taxes and inflation. The Great Depression was used to establish big government, there is no need for another one. If anything we could just trudge through a persistent economic stagnation, like Japan.

 

[AceNZ]

-The modern industrial revolution was really only about 30 years old, manufacturing and technology was still primitive compared to today. We can produce much more with less; technological advancement will ensure there will always be enough "things" available, such as food, clothes, the basic neccesities.

Why do you think that "technological advancement" will ensure that there are always enough basic commodities available? Or if they are available, what makes you think that they will always be affordable to the average American?

Cotton and food have to be grown, fertilized, harvested and transported -- each step currently requires oil. What if oil prices went up by another factor of 5? That's something that could easily happen, given the decline in the dollar and increasing demand from Asia.

-The nation's infrastructure was still primative. Roads were knee deep in mud, much of the country didn't have electricity. Railroads were probably at their peak around this time, but they have declined dramatically, replaced with autos, trucks, airplanes.

Today, the nation's infrastructure is in a declining state of disrepair. Transportation is available, but costs will continue to increase with the price of oil. It seems possible to me that in the near future, air travel might only be affordable by the very rich. Don't forget that the production of cars and planes is intensely energy intensive, so prices for those "basics" will continue to increase too.

-Communication was slow. Snail mail was the norm. Some people had phones. No TV. Radio powered with batteries.

What would happen if people couldn't afford to keep their phones? What if radios and TVs were no longer affordable?

- The Federal Reserve learned its lesson, don't contract the money supply. Enough of us understand why it happened (but sadly too many still don't, they blame the "market"). If they try the same thing again enough people will be able to call them on it.

Bernanke studied the causes of the Depression at great length. He believes that it could have been prevented if the Fed had acted more aggressively, based on his Keynesian view of the world. According to the Austrian view, he's dead wrong. Amazingly, it looks like he'll get the chance to try out his theories (makes one wonder why he was picked to be chairman, doesn't it?).


Look, the basic situation is that wealth is a result of production. America has moved most of its production overseas, and its wealth has followed. It has devolved into a service and consumer based economy. Wealth is not being produced, it's being spent. To make matters worse, Americans are borrowing to fund their spending. Plus, the government is now socialist and imperialist, with huge spending on social programs and in attempts to maintain the US overseas empire. I couldn't imagine a more precarious scenario if I tried!