Does the World Actually NEED another "Great Depression"?

LazyLion

LazyLion

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Fed’s $85 Billion Loan Rescues Insurer

http://www.nytimes.com/2008/09/17/business/17insure.html?_r=2&hp&oref=slogin&oref=slogin

http://money.cnn.com/2008/09/16/news/companies/AIG/index.htm?cnn=yes

The US Government is really not in a position to be loaning money to anyone right now.

Conditions are almost perfect for a run on the stock market causing another massive "Black Tuesday" sell off and crash of the World's markets.

This would trigger another worldwise Great Depression... but it would also force people to go back to simpler lifestyles and wipe out all their current debt.

http://en.wikipedia.org/wiki/Great_Depression

Is this maybe not a good thing?

1) decrease in debt
2) agrarian economies revived
3) family based structures revived
4) labour market re-populated
5) removal of social economics and revival of simple barter market
6) Stimulation of infrastructure investment as governments put people back to work rebuilding the countries
7) removal of false stores of value (people investing in "ideas" rather than actual real-life production).

Downsides as given below by posters...

9: Starvation
10: Once well off people reduced to living in squalor
11: Potential war as countries compete for diminished resources - on a worldwide scale this is a very real possibility
12: Large scale aggregation of land/assets by large companies who take advantage of a sudden drop in prices - resulting in further exploitation of working classes

... Discuss
 
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well the first great depression was a nightmare but if the US can sustain the debt then sure they can keep on loaning money
 
You forgot to include a few additional characteristics of a great depression:

9: Starvation
10: Once well off people reduced to living in squalor
11: Potential war as countries compete for diminished resources - on a worldwide scale this is a very real possibility
12: Large scale aggregation of land/assets by large companies who take advantage of a sudden drop in prices - resulting in further exploitation of working classes

I think you need to take off your halcyon glasses bud.
 
cerebus said:
You forgot to include a few additional characteristics of a great depression:

9: Starvation
10: Once well off people reduced to living in squalor
11: Potential war as countries compete for diminished resources - on a worldwide scale this is a very real possibility
12: Large scale aggregation of land/assets by large companies who take advantage of a sudden drop in prices - resulting in further exploitation of working classes

I think you need to take off your halcyon glasses bud.
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I know there were massive downsides... it was after all called the Great DEPRESSION

my point is... how long can the world markets continue to carry massive debt and pseudo-investment in nothing but "confidence" alone.

at some point reality has to kick in and say... enough.
 
What should have happened is that the US central bank, instead of pandering to the investment banks' irresponsible debt handling, let them suffer the consequences of their own hubris over 10 years ago. The US needed some knock backs to purge their economy. Instead it built up to what could potentially be a global disaster, that in no way could ever be considered a positive thing. A 'wake up call' to the investment community equates to the losses of millions of jobs for the working class community.
 
cerebus said:
What should have happened is that the US central bank, instead of pandering to the investment banks' irresponsible debt handling, let them suffer the consequences of their own hubris over 10 years ago. The US needed some knock backs to purge their economy. Instead it built up to what could potentially be a global disaster, that in no way could ever be considered a positive thing. A 'wake up call' to the investment community equates to the losses of millions of jobs for the working class community.
Click to expand...

Yes, there are cycles of "reality kicking in"... but I think one of the biggest problems is the USA's own pride in its economy and the American Dream... to admit that things are "getting out of hand" ... is a hard thing to do. I agree the corrections should have been made years ago. So will people take this current scare as a wake up call? or is it too late... the cracks have already begun to appear?
 
The thing is there has never been a global depression. We have no idea what effects it could have. But these days there is no such thing as a truly localised economy, and the US economy was growing on the basis of the strength of the economies of the third world. And those countries were growing on the basis of US investment, and they arguably are not strong enough to sustain themselves. A collapse of the US economy could be absolutely disastrous.

If you think it just means that people will pack up their laptops and stumble out into the fresh air, I think you aren't fully cognisant of the seriousness of the situation. Already strained international diplomatic relationships are going to snap.
 
cerebus said:
If you think it just means that people will pack up their laptops and stumble out into the fresh air, I think you aren't fully cognisant of the seriousness of the situation. Already strained international diplomatic relationships are going to snap.
Click to expand...

so you mean, pack up your laptop and pick up your gun? :D Only this time it will be the Chinese, Russians or Muslims the West will be fighting. Wonder which side SA will be on? :rolleyes:
 
I welcome the crash of the world. This would bring us back to life again and stop this rat rate with only one conclusion = death + money.
 
vxv said:
I welcome the crash of the world. This would bring us back to life again and stop this rat rate with only one conclusion = death + money.
Click to expand...

hehe... I have to agree there. That is kinda why I started the thread.

I for one would welcome going back to working a farm and feeding my own family... problem is... to do that in today's society... the bank owns your farm... and your life... which is basically the case with my life now anyway. Who am I working for? My employer... and my bank. Life is about debt... you are born into it from day one.
 
Garyvdh said:
hehe... I have to agree there. That is kinda why I started the thread.

I for one would welcome going back to working a farm and feeding my own family... problem is... to do that in today's society... the bank owns your farm... and your life... which is basically the case with my life now anyway. Who am I working for? My employer... and my bank. Life is about debt... you are born into it from day one.
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That's a fact, we need to change that. I would like to do exactly the same, but it is too expensive and yes, you sell your soul.

We work for the bank and the Tito is our boss. We need to fire ourselves and return...Just as soon as my car is paid off so I can get there. LOL :)
 
But why do you imagine that a depression would bring back a free agrarian society? The model of government would still be capitalistic, only the inequality of wealth would suddenly become even more pronounced. During the US Great Depression, the result was that major corporations were able to buy land at incredibly cheap prices, the labour market was oversaturated with unemployed workers who were willing to do any amount of work just to feed their families, while a small group of merchants grew fat. Does that sound like this bucolic fantasy you're talking about?
 
cerebus said:
But why do you imagine that a depression would bring back a free agrarian society? The model of government would still be capitalistic, only the inequality of wealth would suddenly become even more pronounced. During the US Great Depression, the result was that major corporations were able to buy land at incredibly cheap prices, the labour market was oversaturated with unemployed workers who were willing to do any amount of work just to feed their families, while a small group of merchants grew fat. Does that sound like this bucolic fantasy you're talking about?
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Very strong argument, you seem to have a great sense of this and I would sincerely be interested in you indulging us with your solution or view.

I agree the model of government needs to be upgraded between social, communist and democracy. Something new with innovation…

We are already in a depression globally. We should have never allowed the banks to finance property we already owned in the first place.

No, it doesn’t. But I do indulge an idealistic melt in the philosophy that we need to enable ourselves as one symbiotic organism and not a competing virus.

Burn the money…:)
 
cerebus said:
But why do you imagine that a depression would bring back a free agrarian society? The model of government would still be capitalistic, only the inequality of wealth would suddenly become even more pronounced. During the US Great Depression, the result was that major corporations were able to buy land at incredibly cheap prices, the labour market was oversaturated with unemployed workers who were willing to do any amount of work just to feed their families, while a small group of merchants grew fat. Does that sound like this bucolic fantasy you're talking about?
Click to expand...

How do you think those people are going to feed themselves unless they find a piece of land and start farming it? The difference is the world population in 1930 was 2 Billion... now is over 6.6 Billion. Millions would die of starvation yes... and the rest would plant twenty rows each of corn the next day on the nearest piece of open land... and pray they survived to harvest. Inevetable growth in the Agrarian market. These are cold hard facts. Corn becomes the new currency.
 
So you see the mass starvation of the greater body of the world's population as a positive step?

In fact the irony is that even in a depression there is no need for anyone to starve, there is no drop in the level of arable land, farming techniques are as productive as ever, the world can still produce a surplus of food. So there is no need for society to ever revert to an agrarian lifestyle, and it never will.

The question is who owns the methods of production, who controls the food supply. There is no Joseph's storehouse, a capitalist society is self-serving to the uttermost. Without profit they simply would not produce, the land would be allowed to rot. A total financial meltdown would probably look something like Zimbabwe.
 
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