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Old 11-08-2008, 02:14 AM   #1
sneakerone
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Default Worse than the Great Depression

Worse than the Great Depression

by Dr. Krassimir Petrov

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 countries. 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 that preceding the Great Depression. It is assumed outright that the Great Depression could never happen again, thus obviating the need for such a comparison.

The macroeconomic fundamentals today are much worse. 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.

Duplicating Mistakes from the Great Depression
At its core, the environment of the 1990s, and the response of the Fed to the tech-telecom bust has created an economic environment that has encouraged the repetition of the very same mistakes that led to the Great Depression. Here is a concise summary of widely recognized mistakes of the 1920s, with obvious parallels to the current environment:
  • 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.
Worse than the Great Depression
So, why Worse Than The Great Depression? What makes me believe that the current depression will be worse than the Great Depression? I present six of the most important fundamentals that are “baked in the cake” and that suggest of a Greater Depression.
  1. Overvalued Real Estate. The real estate market has been driven by a number of innovations in real estate finance. Overvaluation in real estate implies overvaluation in real estate financial instruments; an implosion of real estate prices implies an implosion in those instruments. It is widely recognized by economists that the Case-Shiller Index is a good proxy for the prices of real estate. A widely-recognized chart from 1890 to 2007 tells the story. The chart makes it crystal clear that the current overvaluation of real estate in real terms grossly exceeds the one during the 1920s. The coming correction in real estate will be protracted and gut-wrenching, with an expected cumulative effect that is much worse than the Great Depression.

    .
  2. Total U.S. Credit. Credit makes leverage: the more credit in the financial system, the more leveraged it is. Today’s total U.S. credit relative to GDP has surpassed significantly the levels preceding the Great Depression. Back then, the total amount of credit in the financial system almost reached an astonishing 250% of GDP. Using the same metric today, the debt level in the U.S. financial system surpassed 350% in 2008, while the level in 1982 was “only” 130%. As Charles Dumas from Lombard Street Research put it quite aptly, "we've had a 30-year leveraging up of America, ending in an unchecked orgy."

    The chart below shows a dramatic buildup of debt (leverage) in the 1920s and a deleveraging from 1930 to 1945 (or 1952). Then it shows a consistent buildup of debt afterwards, with a dramatic rise since the 1990s, and surpassing in 2000 the previous peak in 1929. The chart shows the level of 299% at the end of 2005, but the level has already reached 350% by 2008.



    Of course, leveraging, as already indicated above, must necessarily be followed by deleveraging.

    The best way to think about leverage is to compare it with using drugs, while deleveraging is like detox. The problem is not that the detox is killing the patient who has abused drugs for years; what is really killing the patient is the drug abuse itself. However, one thing is clear – the patient must either go through a painful detox or die; the same applies for the financial system – it must either deleverage or implode.
  3. Explosion of Derivatives. Derivatives have been likened by Warren Buffet to “financial weapons of mass destruction”. The notional amount of total derivatives, as well as “Value at Risk” (VaR), has skyrocketed in recent years with the potential to destabilize the financial system for decades. To put it more allegorically, derivatives hang like a sword of Damocles over the financial system.

    A comparison with the 1920s is difficult to make. mostly Derivatives back then were extensively used, although not widely understood. Given that I am not aware of any statistics of derivatives for the period of the 1920s, a meaningful comparison based on hard data is admittedly impossible. Nevertheless, I would venture to make an intelligent guess that the size of modern-day derivatives is hundreds or even thousands of times larger relative to the size of the economy in comparison to the 1920s. Some of the latest reports indicate that the total notional value of derivatives outstanding surpasses one quadrillion dollars. To put this into perspective, this amounts to almost 100 times the GDP of the U.S. economy.

    The chart below shows the explosion of derivatives in the U.S. banking system. You can see that in 1991 the notional value of the derivatives was about the size of the U.S. GDP. By 2006 the size has grown to about 10 times the GDP, vastly outgrowing the real economy.




    The chart below shows an even more telling picture. It shows world GDP and world’s notional value of derivatives. Again, while there is no direct comparison with the 1920s, it is clear that the overall level of derivatives has skyrocketed during the last two decades and presents risks that were simply not present at the onset of the Great Depression. The unwinding of these derivatives could only be compared with a nuclear explosion in the financial system.

  4. Dow-Gold Ratio. The Dow-Gold ratio represents the most important ratio between the relative prices of financial assets and real assets. The Dow component represents the valuation of financial assets; the gold component – of real assets. When leverage in the financial system increases significantly, so does this ratio. A very high ratio is interpreted as an imbalance between financial and real assets – financial assets are grossly overvalued, while real assets are grossly undervalued. It also implies that a correction eventually will be necessary – either through deflation, which implies deleveraging and a collapsing stock market, or through inflation, which implies stagnant stock market for many years and steadily rising prices of real assets, commodities, and gold, usually associated with stagnant economy and typically resulting in stagflation. The first case—deflation—occurred during the 1930s, while the second case—stagflation—occurred during the 1970s.

    The graph below illustrates the above concepts. The very high Dow-Gold Ratio in 1929 was followed by the Great Depression, while the higher level in 1966 was followed by the stagflationary 70s. It is evident from the chart the peak in 2000 surpassed the previous two peaks in 1929 and 1966, so this provides a reasonable expectation that the forthcoming return to “normalcy” will be more painful than the Great Depression, at least in terms of cumulative pain over the next 10-15 years.

  5. Global Bubbles. It is impossible to make direct comparison with the 1920s, but today the global economy is rife with bubbles. Back then in the 1920s, the U.S. had its stock and real estate bubbles, while the European economies were struggling to rebuild from the devastations of WW1 that ended in 1919. I am personally not aware of any other bubbles during this period, although I welcome reader feedback on this topic.

    Today the picture is very different. The U.S. economy had a stock market and real estate bubble that has surpassed its own during the 1920s. Colossal US current account deficits have fuelled extraordinary growth in global monetary reserves. As a result, Europe has real estate bubbles across the board, from the U.K. and Ireland, throughout the Mediterranean (Spain, France, Italy and Greece), to the entire Baltic region (Latvia, Lithuania, and Estonia) and the Balkans (Romaina and Bulgaria). Even worse, many Asian countries (China, Korea, etc.) also have their own stock and property bubbles, only with the exception of Japan, which is still in the process of recovering from its own during the 1980s. Thus, during the 1920s only the U.S. suffered from gross financial imbalances, while today the imbalances have engulfed the whole world – both developed and developing. It stands to reason that the unwinding of those global imbalances is likely to be more painful today than it was during the Great Depression due to both size and scope.
  6. Collapsing Bretton Woods II. The global monetary system was on a quasi-gold standard during the 1920s. Back then dollars and pounds were convertible to gold, while all other currencies were convertible to dollars and pounds. An appropriate way to think about it is that of a precursor to the Bretton Woods from 1945-1971. What is important to understand is that while the system was fiat in nature, gold imposed significant limitations to credit expansion and leveraging.

    Somewhat similar was the role of Bretton Woods that lasted from 1945 to 1971. The dollar was tied to gold, while all other fiat currencies were tied to the dollar. Just like the interwar period, gold imposed some limitations on credit and financial imbalances.

    We now live in what has been termed Bretton Woods II. Essentially, this is a pure fiat dollar standard, where all currencies are convertible to dollars, either at fixed or floating exchange rates, while the dollar itself is convertible to “nothing”. Thus, the dollar has no limitations imposed to it by gold, so without the discipline of gold, the current global monetary system has accumulated significantly more imbalances than ever before in modern capitalism. These imbalances show up in the international monetary system as unsustainable trade deficits (and surpluses), skyrocketing official dollar reserves in some European and many Asian central banks, and the proliferation of Sovereign Wealth Funds; more generally, these imbalances result in a myriad of bubbles, overleveraging, and other maladjustments already discussed above.

    Today Bretton Woods II is in the process of disintegration. The world is slowly but steadily losing its confidence in the dollar as the world reserve currency. A flight from the dollar is in progress and the collapse of the global monetary system is imminent. As Bretton Woods II disintegrates and a new system replaces it, the process of readjustment will be necessarily more painful than the respective process during the Great Depression.

    A caution on terminology is necessary here. While the literature over the last 10-20 years has widely recognized the term “Bretton Woods II”, in September-October of 2008 the term was widely used by the media to describe a proposed international summit with the goal of reconstructing a new international monetary system designed from scratch, just like “Bretton Woods”. Instantly dubbed by the media “Bretton Woods II”, this term could be potentially very confusing as it could mean very different things to different people. The interested reader should consult Wikipedia’s Bretton Woods II where both meanings are explained in detail.
Conclusion
Since August of 2007 we have witnessed the relentless escalation of the credit crisis: a steady constriction of credit markets, starting with subprime mortgage-backed securities, spreading to commercial paper, then to interbank credit, and then to CDOs, CLOs, jumbo mortgages, home equity lines of credit, LBOs and private equity markets, and then generally to the bond and securities markets.
While the media describes the problem as one of illiquidity and confidence, a more serious analysis indicates that boom-time credit has been employed unproductively and so losses must be incurred. In other words, scarce capital has been misallocated, poorly invested, and effectively wasted. No amount of monetary or fiscal policy can fix the errors of the past, just like no modern treatment can quickly restore to health a drug addict debilitated from a decade-long drug abuse.
Based on indicators like (1) global real estate overvaluation, (2) indebtedness, (3) leverage, (4) outstanding derivatives, (5) global bubbles, and (6) the precariousness of the global monetary system, I would argue that the accumulated imbalances in the current period surpass significantly those preceding the Great Depression. I therefore conclude that the coming U.S. (and possibly) global depression will be of greater magnitude than the Great Depression of the 1930s. It likely suggests that we are entering a historic period that will likely be known as The Greater Depression.
Investor beware! Only gold can protect you from the ravages of another Depression!

Professor Krassimir Petrov

Krassimir Petrov holds a Ph.D. degree from the Ohio State University in Economics (1999). During 2000-2004 he worked at Sterling Commerce, a subsidiary of SBC Communications. He is Assistant Professor, The American University in Bulgaria teaching Macroeconomics, Money and Banking, and International Finance. Since 2007 Dr. Petrov contributes a newsletter for Agora Financial.
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Old 11-08-2008, 06:02 AM   #2
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Default Re: Worse than the Great Depression

the end of the world as we know it...
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Old 11-08-2008, 06:04 AM   #3
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The economic downturn about to experienced by the citizens of the United States, well, has not been experienced by them in-country for about 70 years. My only hope is that citizens of the U.S., myself included, will learn the lessons they did, and some they didn't.

Peace to you all.
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Old 11-08-2008, 06:11 AM   #4
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Default Re: Worse than the Great Depression

this is worse than the funky down trurn in 1982, and worse then that year all my christmas gifts broke on christmas morning. Once I found twenty bucks, that was a good day.

it's only a depression if you are out of work, if other people are out of work it is just a resession.

I am working on being more bi-polar that way I can ask myself questions and know I will get an unbiased answer.
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Old 11-08-2008, 06:17 AM   #5
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Default Re: Worse than the Great Depression

It's good to see scholars like Petrov highlighting the understatement that the media and public are frequently making in equating the current crisis with the Great Depression.

In reality, there _is_ a historical parallel to the crisis now being faced - it is the long bear market of 1720-1784. That bear market essentially consisted of two major depressions interrupted by two long recoveries in the 1730s-40s and again in the 1760s.

The experience of the eighteenth century suggests a couple of things for those preparing to get through the bear market that is unfolding now:

1) The crash will not likely unfold as a straight collapse downward. Instead, it will be punctuated by numerous (sometimes sharp) periods of hopefulness, apparent recovery in quantitative economic indicators, etc.

2) The post-crash recovery is probably going to be a long, drawn-out process spanning decades. Even if the first major economic bottom is reached in or around 2012, survivors of the crash will have to undertake a prolonged and arduous rebuilding process. Society may well not really get back on its feet until the second half of the century.
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Old 11-08-2008, 07:21 AM   #6
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Quote:
Originally Posted by capreycorn View Post
the end of the world as we know it...
(And I Feel Fine)


Interesting post, I know everyone is saying buy gold, but what are the alternatives if you don't have access to buy large quantities of gold (or other precious metals)?
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Old 11-08-2008, 07:31 AM   #7
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Quote:
Originally Posted by _N_ View Post
(And I Feel Fine)


Interesting post, I know everyone is saying buy gold, but what are the alternatives if you don't have access to buy large quantities of gold (or other precious metals)?
Stuff you can barter with: food, water, smokes, coffee, seeds, beer, alcohol. Oh yeah, a manual can opener.
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Old 11-08-2008, 04:29 PM   #8
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So you are all saying we are going to starve to death and die, etc, etc.

Why not just kill ourselves now and get it over with?
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Old 11-08-2008, 07:09 PM   #9
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So you are all saying we are going to starve to death and die, etc, etc.

Why not just kill ourselves now and get it over with?
why miss the showdown...
..and barter is the key-word:
http://baconreport.blogspot.com/2007...st-during.html

and start growing lots of marijuana...great barter!
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Old 11-08-2008, 09:19 PM   #10
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I think this is why it's going to be so important to get a GOOD MAP and create small communities and grow from the bottom up. getting out of the big cities. Also, I think it's important to keep working on our internal selves as well, because if we buy into the fear of it all, we might make a bunch of decisions based on fear and not creativity.
Maybe our ground crews will end up starting with our neighbors our our best friends or even our co-workers. Whoever we already have some sort of community with and let's say we lose power, internet, phones, we know where these people live and the only means of communicatiing with people if in person.
No matter how bad the news is, we need to not feed into the negativity but create peace within and take the peoper measures.
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Old 11-09-2008, 05:10 PM   #11
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You missed the sarcasm in my post.

I am not worried about a collapse where people starve to death because that wont happen, regardless of what people on this forum think.

We do not live in a Vacuum. The world is not static. Like it or not, governments do have an impact and they will keep things like that from happening.

Obviously, life may not be all roses and champaign, but it wont be death camps.
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Old 11-10-2008, 03:55 PM   #12
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Does anyone know where to get the charts he uses to back up the data? I totally agree with his premise but I would like to have the data to back it up.

The thing that everyone assumes when they review what's happening in the current financial world is that there was a mistake made! That we are repeating the mistakes of the past. Mistake is a relative term. Just because something looks like it was unfortunately ignored until it was too late does not mean it was done by accident. Remember the only way you can cause the world to consolidate its finances is by forcing everyone's back against the wall. Countries would never agree to cooperate and bail each other out unless they were put in a position of being codependent.

Greed was used as a weapon. It's kind of like the tactic a pool shark; He lays back and lets the greedy opponent get cocky and then ups the anti. The sucker takes the bate, and then is on the hook to be dangled any direct the shark wants him to go!

The next steps you will see voluntarily happen is the formation of a European governmental body to oversee the financial crisis. This looks likely to happen in the 1st quarter of 2009. The bail out was the beginning of the end of the world infrastructure that has existed for hundreds of years. A structure which followed the golden rule: "the country with the gold made all of the rules". We officially took that role with Bretton Woods in 1945. The world has been sucked into a financial crisis not by accident but by strategic necessity. We have finally reached a point where the world will gladly accept being boiled down to regions.

So why the bailout? The only way to facilitate the consolidation of the world finances is to clear the upside down balance sheets of the small (but still too large) group of banking corporations that exist today. In order to accomplish this, some of the banks must be given money to be used to pay off their debts and also so that that they can buy up the other institutions not deemed to be part of the final small group of institutions to be left. The public has been convinced that the $trillion (soon to be trillions) that the Fed and the European central bank have already printed and have started to hand out will be used to ease credit. By the way, just as a side note, the amount of interest that is owed the Federal Reserve to date for money borrowed by the US government since the creation of the Fed in 1913 is $700 billion dollars. Anybody recognize that number? So the first $200 billion that was handed out By Paulson was to the "good 9 banks" these are the ones that will now have the ability to eat up the susceptible competition and significantly reduce the ranks.

So what is the next step in the play? The other bubble that must be removed from the international bank's balance sheets is the credit card debt. This will be the next feel good legislation to hit congress. The cry will "We must help the people pay off their credit card debt!" So now that we've established that we have an unlimited amount of dollars to solve any situation we set up another gigantic bailout to eliminate the credit card liability on the banks ledgers. Don't be surprised also if Barack repeats the history of FDR and calls for the confiscation of privately owned gold!

Everyone honestly believes that at the highest levels of the world's financials that the no one saw this coming. We are in an electronic age where statistics are available to analyze and financial ratio or comparison that one wishes real time. The pool sharks of that world set the trap and the rest of the greedy fell for it making us the financial fodder and bringing us to the brink of a consolidated world!
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Old 11-10-2008, 04:10 PM   #13
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It's becoming rather obvious that the "immediate crisis" that Obama may have to deal with is a force majeure of the US debt and movement to the Amero.
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Old 11-10-2008, 04:29 PM   #14
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A quick note on the unemployment numbers:

Keep in mind that when the stock market crashed in October of 1929, it took years for the effects to manifest as a social low - the winter of 1932-33 was lovingly called the "Winter of Despair." That is when the zeinith of Depression was felt by most of the masses.

As for unemployment, the official census numbers that are used today show a 25-30% national uneployment rate for the winter of 1932-33. This percentage only lasted a month or two, and steadily declined thereafter (after FDR's "Second New Deal"). Secondly, as that only represents the national average, there were regional pockets of unemployment that hovered around 50-60%, and a few that hit 80%. When the stock market crash, credit crunch, and banking failures hit in the early 1930s, the average citizen didn't feel much pain. Then one day, they got up, went to work, and found the place locked - and if their next stop was the bank, it was either closed or out of money. With that said, the numbers we see today associated with the current crisis are nowhere near what they were during the Great Depression. That is not to say, however, that they could not quickly approach them - which sadly, IS the statistical trend.

I think unemployment is the key stat. Remember, two, three years ago, the mainstream media made a big deal about 1/10 of a percent increases and decreases in an unemployment rate that had been hovering around 5%. A few years later, and the national average is now rocketing toward 10% (and has passed it in regional pockets). My own guess - I can't see the future and have used no mystical powers, this is just a guestimation - is that over the next 4-6 months, if the national unemployment rate moves past 10%, and quickly, we will see a repeat of the Great Depression. We simply are not creating jobs in this nation, and we're losing, what, 200-300 thousand jobs a month now? If this number does not stabilize, the grandparents who saved every scrap of metal, every grocery bag, and every reciept will become a whole heckuva' lot more understandable by all of us.
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Old 11-10-2008, 05:15 PM   #15
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Its funny the way he called it "the greater depression". Not the "more horrible depression" or anything like that. No, its "greater" because its an even bigger accomplishment for the NWO gang. They dont half make it obvious do they?
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Old 11-10-2008, 06:07 PM   #16
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Default Re: Worse than the Great Depression

hi everybody on this thread,

The depression is coming. That there is no doubt. It's just a case of when.

The governments of the world are pumping extraordinary sums of limited public money into the financial system so that the banks can continue lending money, doing the very thing they did that got us into this mess in the first place.

We can see the outsides begining to crumble with unemployment stats worse than expected, Ford laying off 10% of their workforce in the US, drastic fall in sales of cars, one of the principal sources of income of the US government.

Today Circuit City, one of the largest electronics retailers filed under chapter 11, DHL pulled their operations from Ohio, AIG is to get another 150billion dollars of public money http://news.yahoo.com/s/ap/20081110/...ge/aig_bailout as they still haven't managed to sort their problems out, in spite of the 7billion dollar bonuses they will give their execs for Christmas this year.

Over the weekend G20 countries met in São Paulo to discuss possible proposals and conclusions at the G20 meeting to be held in the Washington, I believe this week.

Reading between the lines, the developing countries are begining to understand that they will have an important part to play in the global economic recovery and are starting to bite back.

For years the IMF has been lending money to these countries with a lot of strings attached. Many strings including exploiting these countries for their natural resources.

It could very well occur that the wild wolf is about to get bitten back, as the developed countries have a lot more to lose than their developing counterparts.

As Brazilian economics secretary Mantega said, "First we will see inflation, followed by deflation during 2009".

The already teetering economy of the US which produces very little in terms of national products anyway, I think is going to suffer a pounding.

I don't think any of us really know what the great depression was like in 29, but I think we are going to find out.

Best regards,

Steve


Quote:
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A quick note on the unemployment numbers:

Keep in mind that when the stock market crashed in October of 1929, it took years for the effects to manifest as a social low - the winter of 1932-33 was lovingly called the "Winter of Despair." That is when the zeinith of Depression was felt by most of the masses.

As for unemployment, the official census numbers that are used today show a 25-30% national uneployment rate for the winter of 1932-33.
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Old 11-10-2008, 10:12 PM   #17
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Default Re: Worse than the Great Depression

Hi everybody on this thread,

Just to add a little fuel on the fire, GM posted record losses and is considered a 'bankrupt' company by German banks.

When the going gets tough....

http://news.yahoo.com/s/afp/20081110...sautocompanygm

Best regards,

Steve
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Old 11-10-2008, 10:27 PM   #18
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Quote:
Originally Posted by Steve_A View Post
Hi everybody on this thread,

Just to add a little fuel on the fire, GM posted record losses and is considered a 'bankrupt' company by German banks.

When the going gets tough....

http://news.yahoo.com/s/afp/20081110...sautocompanygm

Best regards,

Steve
Sad what impact a few words can have isn't it?

Note the bit at the bottom?-

"President-elect Barack Obama responded to the plea by saying in his first post-election news conference that he is placing "a high priority" on helping the auto industry during his preparations to assume office on January 20."

I see quite a few news articles pointing to a financial crisis around the time of Obama's kick off.
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Old 11-11-2008, 05:20 AM   #19
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Default Re: Worse than the Great Depression

The consumer is strapped and has no more to spend, business can't obtain loans to spend, and the government is giving away billions of tax dollars to any company with their hand out. Yep, we're screwed.
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Old 11-11-2008, 08:38 AM   #20
RSF
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Default Re: Worse than the Great Depression

Hey all,
Steve A, Seems to me a big bunch of Autoworkers are going to lose their jobs irregardless of the amount of moola the Feds decide to give or loan Ford, GM and/or Chrysler.

When we're not buying new cars then their not building them too. It's a sh___ situation and it'll get worse just before getting better.
But peoples of the USA should consider the same sort of thing happening -- across the labor board, I'd suggest.

RSF
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Old 11-11-2008, 09:49 AM   #21
Mikill
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Default Re: Worse than the Great Depression

Faustian Bargian people.blame big business.Outsourcing jobs overseas to double profit margins.Now it's time for everyone to pay.a few 100 billion dollar band-aids cant undo years of screwing up.
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Old 11-11-2008, 06:42 PM   #22
Arcane Son
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Default Re: Worse than the Great Depression

Check out this brief interview with Gerald Celente. I can't believe it actually made it on Fox news. He openly says things are going to be worse then the great depression.

http://www.youtube.com/watch?v=46MEqEgdLTg
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Old 11-11-2008, 07:25 PM   #23
sammytray
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Default Re: Worse than the Great Depression

Quote:
Originally Posted by ralok_j View Post
The consumer is strapped and has no more to spend, business can't obtain loans to spend, and the government is giving away billions of tax dollars to any company with their hand out. Yep, we're screwed.
I concur, however not screwed. We are in the midst of an amazing opportunity to collectively "rise" up!

I can feel it... I can feel coming...
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Old 11-11-2008, 07:27 PM   #24
sammytray
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Default Re: Worse than the Great Depression

Quote:
Originally Posted by Steve_A View Post
Hi everybody on this thread,

Just to add a little fuel on the fire, GM posted record losses and is considered a 'bankrupt' company by German banks.

When the going gets tough....

http://news.yahoo.com/s/afp/20081110...sautocompanygm

Best regards,

Steve
Just to add, GMAC will be/is dissolved.
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Old 11-11-2008, 08:54 PM   #25
Steve_A
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Default Re: Worse than the Great Depression

Hi Everyone,

WASHINGTON (AP) -- House Speaker Nancy Pelosi called for "emergency and limited financial assistance" for the battered auto industry on Tuesday, to be completed within days in a postelection session of Congress.

Five days after dismal financial reports from General Motors Corp. and Ford Motor Co., Pelosi backed legislation to make the automakers eligible for help under the $700 billion bailout measure that cleared Congress in October.

http://hosted.ap.org/dynamic/stories...MPLATE=DEFAULT

Best regards,

Steve
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