With or without Donald Trump, … this is the Greatest Depression.
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With or without Donald Trump, … this is the Greatest Depression.
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This is the Greatest Depression.
Many economic indicators are at their worst since the Great Depression …
For example, we noted in 2009 that more Americans will be unemployed than during the Great Depression.
We noted in 2010:
The following experts have – at some point during the last 2 years – said that the economic crisis could be worse than the Great Depression:
You’ve heard the axiom “History repeats itself.” It does, but never in exactly the same way. To apply the lessons of the past, we must understand the differences of the present.
During the American Revolution, the British came prepared to fight a successful war—but against a European army. Their formations, which gave them devastating firepower, and their red coats, which emphasized their numbers, proved the exact opposite of the tactics needed to fight a guerrilla war.
Former elite puppet finance minister …
And as I’ve said many, many times: This is the Greatest Depression.
Greece’s financial crisis, unprecedented in scope, reached a pivotal moment last summer when the Greek people voted overwhelmingly against further austerity programs — ostensibly imposed to help the country pay back enormous debt. Overseeing the matter was Syriza Party Finance Minister Yanis Varoufakis — a staunch opponent of the crippling austerity measures that had effected a stranglehold on the country’s economy.
Greece’s debt to the so-called Troika — the International Monetary Fund, European Commission, and European Central Bank — turned out not to be the true reason for the proposed austerity. As Varoufakis discovered, the Troika actually, if somewhat covertly, intended to decimate Greek organized labor and the country’s modest social safety net. After the Greek populace stunned the world with its ‘no’ vote, Varoufakis sensed the coming accession by Syriza to implement the plans — and he hastily and quietly resigned his post.
On Monday, the price of U.S. oil dropped below 38 dollars a barrel for the first time in six years. The last time the price of oil was this low, the global financial system was melting down and the U.S. economy was experiencing the worst recession that it had seen since the Great Depression of the 1930s. As I write this article, the price of U.S. oil is sitting at $37.65. For months, I have been warning that the crash in the price of oil would be extremely deflationary and would have severe consequences for the global economy. Nations such as Japan, Canada, Brazil and Russia have already plunged into recession, and more than half of all major global stock market indexes are down at least 10 percent year to date. The first major global financial crisis since 2009 has begun, and things are only going to get worse as we head into 2016.
– Similarities Between China’s Stock Market Crash and 1929 Are Eerie (David Stockman’S Contra Corner, July 10, 2015):
By David Zeiler at Money Morning
For students of history, the China stock market crash looks eerily familiar.
It’s playing out much like the Wall Street stock market crash of 1929.
In case you’ve been distracted by such things as the Greek debt crisis and a bizarre glitch that shut down the New York Stock Exchange for more than three hours Wednesday, the Chinese stock market has been in a free fall lately.
Now that sums up the current situation nicely.
From the article:
“This is not going to be a 1921-style two-year recession that we bounce back from after a little bit of pain and unpleasantness. After a 50-year global economic boon involving what is now a $59 trillion expansion of credit in 50 years, this isn’t going to be a one or two-year hard recession. This is going to be a multi-decade global depression and I’m not sure that anyone alive today would live long enough to see the recovery. I mean, it’s like Rome: when Rome fell, there was a recovery, but it was 1,000 years later. This is the kind of depression we’re looking at if we allow this $59 trillion credit bubble of ours to implode.”
– Richard Duncan: The Real Risk Of A Coming Multi-Decade Global Depression (Peak Prosperity, April 5, 2015):
Richard Duncan, author of The Dollar Crisis and The New Depression: The Breakdown Of The Paper Money Economy, isn’t mincing words about the risks he sees ahead for the world economy.
Essentially, he sees the past 50 years of economic prosperity fueled by globalization and easy credit in serious danger of being unwound, as the doomed monetary policies currently being pursued by the word’s central banks result in a massive multi-decade depression that spans the globe.
The first version of The Dollar Crisis, the hardback, came out in 2003, so I wrote it in 2002. And at that time, the dollar against gold was $300. So the dollar has lost more than 75% of its value since The Dollar Crisis was written, and I don’t think it’s going to stop here. I expect it to continue to lose value over the years and decades ahead.
But what we’re seeing is that the real theme of The Dollar Crisis was that the post-Bretton Woods international monetary system was fundamentally flawed because it couldn’t prevent trade imbalances between countries. And the US had developed an enormous trade deficit with the rest of the world and this blew the trade surplus countries like Japan and China into bubbles. And then, the dollars boomeranged back into the United States and blew it into a bubble, as well. I didn’t know when the housing bubble was going to pop in the US but I knew it would. And I wrote in The Dollar Crisis that when it did, we would have a severe global economic recession/depression that would involve a systemic banking sector crisis in the United States and necessitate trillion-dollar budget deficits and unorthodox monetary policy to prevent a Great Depression from occurring.
– The Economic End Game Explained (ALT-MARKET, Nov 12, 2014):
Throughout history, in most cases of economic collapse the societies in question believed they were financially invincible just before their disastrous fall. Rarely does anyone see the edge of the cliff or even the bottom of the abyss before it has swallowed a nation whole. This lack of foresight, however, is not entirely the fault of the public. It is, rather, a consequence caused by the manipulation of the fundamental information available to the public by governments and social gatekeepers.
In the years leading up to the Great Depression, numerous mainstream “experts” and politicians were quick to discount the idea of economic collapse, and most people were more than ready to believe them. Equities markets were, of course, the primary tool used to falsely elicit popular optimism. When markets rose, even in spite of other very negative fiscal indicators, the masses were satisfied. In this way, stock markets have become a kind of dopamine switch financial elites can push at any given time to juice the citizenry and distract them from the greater perils of their economic future. During every upswing of stocks, the elites argued that the “corner had been turned,” when in reality the crisis had just begun. Nothing has changed since the crash of 1929. Just look at some of these quotes and decide if the rhetoric sounds familiar today:
– Washington Post: Europe Is Stuck In a “Greater Depression” (Washington’s Blog, Aug 15, 2014):
“It’s a Little Misleading to JUST Call This a Depression. It’s WORSE than That”
The Washington Post’s Wonkblog reports:
Europe hasn’t recovered, because it hasn’t let itself. Too much fiscal austerity and too little monetary stimulus have, instead, put it more than halfway to a lost decade that’s already worse than the 1930s.
It’s a greater depression.
– The Delusion Of Perpetual Motion; Bob Shiller Warns “I’m Definitely Concerned” (ZeroHedge, June 29, 2014):
“I am definitely concerned. When was [the cyclically adjusted P/E ratio or CAPE] higher than it is now? I can tell you: 1929, 2000 and 2007;” warned Bob Shiller this week, adding that “it’s likely to turn down again, just like it did the last two times.”
As John Hussman explains,
The central thesis among investors at present is that they are “forced” to hold stocks, given the alternative of zero short-term interest rates and long-term interest rates well below the level of recent decades (though yields were regularly at or below current levels prior to the 1960s, which didn’t stop equities from being regularly priced to achieve long-term returns well above 10% annually). The corollary is that investors seem to believe that as long as interest rates are held near zero, stocks will continue to advance at a positive or even average or above-average rate.
– Is the Stock Market Repeating the 1929 Run Up to the Great Depression? (ZeroHedge, Feb 12, 2014):
Chart courtesy of Tom McClellan of the McClellan Market Report (via Mark Hulbert)
Hulbert notes that the chart “has been making the rounds on Wall Street.”
On the other hand, Martin Armstrong predicts that a worsening economy – and bank deposit confiscation – in Europe will cause people to flood into American stocks as a “safe haven” for a couple of years.
And the Fed has more or less admitted that propping up the stock market is a top priority.
– How Central Banks Cause Income Inequality (Ludwig von Mises Institute, Feb 1, 2014):
The gap between the rich and poor continues to grow. The wealthiest 1 percent held 8 percent of the economic pie in 1975 but now hold over 20 percent. This is a striking change from the 1950s and 1960s when their share of all incomes was slightly over 10 percent. A study by Emmanuel Saez found that between 2009 and 2012 the real incomes of the top 1 percent jumped 31.4 percent. The richest 10 percent now receive 50.5 percent of all incomes, the largest share since data was first recorded in 1917. The wealthiest are becoming disproportionally wealthier at an ever increasing rate.
Most of the literature on income inequalities is written by professors from the sociology departments of universities. They have identified factors such as technology, the reduced role of labor unions, the decline in the real value of the minimum wage, and, everyone’s favorite scapegoat, the growing importance of China.
Those factors may have played a role, but there are really two overriding factors that are the real cause of income differentials. One is desirable and justified while the other is the exact opposite.
– Peter Schiff Destroys The “Deflation Is An Ogre” Myth (ZeroHedge, Jan 22, 2014):
Submitted by Peter Schiff via Euro Pacific Capital,
Dedicated readers of The Wall Street Journal have recently been offered many dire warnings about a clear and present danger that is stalking the global economy. They are not referring to a possible looming stock or real estate bubble (which you can find more on in my latest newsletter). Nor are they talking about other usual suspects such as global warming, peak oil, the Arab Spring, sovereign defaults, the breakup of the euro, Miley Cyrus, a nuclear Iran, or Obamacare. Instead they are warning about the horror that could result from falling prices, otherwise known as deflation. Get the kids into the basement Mom… they just marked down Cheerios!
“There is no cause to worry. The high tide of prosperity will continue.” — Andrew W. Mellon, Secretary of the Treasury.
– They Denied That We Were In A Depression In 1933 And They Are Doing It Again In 2013 (Economic Collapse, Sep 12, 2013):
The more things change, the more things stay the same. The Great Depression actually started in 1929, but as you will see below, as late as 1933 the Associated Press was still pumping out lots of news stories with optimistic economic headlines and many Americans still did not believe that we were actually in a depression. And of course we are experiencing a very similar thing today. The United States is in the worst financial shape that it has ever been in, our economic infrastructure is being systematically gutted, and poverty is absolutely exploding. Since the stock market crash of 2008, the Federal Reserve has been wildly printing money and the federal government has been running trillion dollar deficits in a desperate attempt to stabilize things, but in the process they have made our long-term economic problems far worse. It would be hard to overstate how dire our situation is, and yet the mainstream media continues to assure us that everything is just fine and that happy days are here again.
As I have already noted, the mainstream media was doing the exact same thing back during the days of the Great Depression. The following are actual Associated Press headlines from 1933:
– A Nightmare Scenario (Economic Collapse, July 17, 2013):
Most people have no idea that the U.S. financial system is on the brink of utter disaster. If interest rates continue to rise rapidly, the U.S. economy is going to be facing an economic crisis far greater than the one that erupted back in 2008. At this point, the economic paradigm that the Federal Reserve has constructed only works if interest rates remain super low. If they rise, everything falls apart. Much higher interest rates would mean crippling interest payments on the national debt, much higher borrowing costs for state and local governments, trillions of dollars of losses for bond investors, another devastating real estate crash and the possibility of a multi-trillion dollar derivatives meltdown. Everything depends on interest rates staying low. Unfortunately for the Fed, it only has a certain amount of control over long-term interest rates, and that control appears to be slipping. The yield on 10 year U.S. Treasuries has soared in recent weeks. So have mortgage rates. Fortunately, rates have leveled off for the moment, but if they resume their upward march we could be dealing with a nightmare scenario very, very quickly.
In particular, the yield on 10 year U.S. Treasuries is a very important number to watch. So much else in our financial system depends on that number as CNN recently explained…
From the article:
“Whereas the youth unemployment rate for the 17-country eurozone as a whole is 23.8 percent, the proportion of Spain‘s 15-24 year olds out of work is 56.5 percent while Greece‘s stands at 59.2 percent.”
– Eurozone Unemployment Hits All-Time High In May (Huffington Post/AP, July 1, 2013):
LONDON — Unemployment across the 17 European Union countries that use the euro hit another all-time high in May, official data showed Monday.
Eurostat, the EU’s statistics office, said the eurozone’s unemployment rate rose 0.1 percentage point in May to 12.1 percent. April’s unemployment rate was initially estimated to be 12.2 percent, but it was revised down to 12.0 percent thanks to new data, particularly from France.
– Will It Be Inflation Or Deflation? The Answer May Surprise You (Economic Collapse, May 22, 2013):
Is the coming financial collapse going to be inflationary or deflationary? Are we headed for rampant inflation or crippling deflation? This is a subject that is hotly debated by economists all over the country. Some insist that the wild money printing that the Federal Reserve is doing combined with out of control government spending will eventually result in hyperinflation. Others point to all of the deflationary factors in our economy and argue that we will experience tremendous deflation when the bubble economy that we are currently living in bursts. So what is the truth? Well, for the reasons listed below, I believe that we will see both. The next major financial panic will cause a substantial deflationary wave first, and after that we will see unprecedented inflation as the central bankers and our politicians respond to the financial crisis. This will happen so quickly that many will get “financial whiplash” as they try to figure out what to do with their money. We are moving toward a time of extreme financial instability, and different strategies will be called for at different times.So why will we see deflation first? The following are some of the major deflationary forces that are affecting our economy right now…
– Federal Reserve Blows More Bubbles (The Free Foundation, by Ron Paul):
Last week at its regular policy-setting meeting, the Federal Reserve announced it would double down on the policies that have failed to produce anything but a stagnant economy. It was a disappointing, but not surprising, move.
The Fed affirmed that it is prepared to increase its monthly purchases of Treasuries and mortgage-backed securities if things don’t start looking up. But actually the Fed has already been buying more than the announced $85 billion per month. Between February and March, the Fed’s securities holdings increased $95 billion. From March to April, they increased $100 billion. In all, the Fed has pumped more than a half trillion dollars into the economy since announcing its latest round of “quantitative easing” (QE3) in September 2012.
– 20 Signs That The Next Great Economic Depression Has Already Started In Europe (Economic Collapse, April 29, 2013):
The next Great Depression is already happening – it just hasn’t reached the United States yet. Things in Europe just continue to get worse and worse, and yet most people in the United States still don’t get it. All the time I have people ask me when the “economic collapse” is going to happen. Well, for ages I have been warning that the next major wave of the ongoing economic collapse would begin in Europe, and that is exactly what is happening. In fact, both Greece and Spain already have levels of unemployment that are greater than anything the U.S. experienced during the Great Depression of the 1930s. Pay close attention to what is happening over there, because it is coming here too. You see, the truth is that Europe is a lot like the United States. We are both drowning in unprecedented levels of debt, and we both have overleveraged banking systems that resemble a house of cards. The reason why the U.S. does not look like Europe yet is because we have thrown all caution to the wind. The Federal Reserve is printing money as if there is no tomorrow and the U.S. government is savagely destroying the future that our children and our grandchildren were supposed to have by stealing more than 100 million dollars from them every single hour of every single day. We have gone “all in” on kicking the can down the road even though it means destroying the future of America. But the alternative scares the living daylights out of our politicians. When nations such as Greece, Spain, Portugal and Italy tried to slow down the rate at which their debts were rising, the results were absolutely devastating. A full-blown economic depression is raging across southern Europe and it is rapidly spreading into northern Europe. Eventually it will spread to the rest of the globe as well.
The following are 20 signs that the next Great Depression has already started in Europe…