John Coumarianos, Marketwatch: Chilling ways the global economy echoes 1930s Great Depression era
Protectionism, shaky debt, and weak banking systems have consequences
One view of what caused the Great Depression in the 1930s is that the Federal Reserve failed to prevent a collapse in the money supply.
This is the famous thesis of Milton Friedman’s and Anna Schwartz’s A Monetary History of the United States, 1867-1960, and it was, more or less, the view of Ben Bernanke when he was chairman of the Federal Reserve.
The global economy today resembles that of the 1930s in several ominous ways.
Financial author Edward Chancellor recently called attention to a paper written by Caludio Borio, head economist at the Bank of International Settlements, that provides a fuller picture of the causes of the Great Depression. The paper also draws parallels between global economic conditions that led to the rise of protectionism in the 1930s and our situation now.
Read more ....
WNU Editor: In 1992 the Russian economy collapse .... and it had all the hallmarks of the U.S. Great Depression of the 1930s. Mass unemployment, homelessness, no money, no social safety net, .... I saw and experienced it all ... and I vowed to never have that happen to me and to my family again. Flash forward to today .... and trust me on this one .... there are too many similarities between that time and today. I pray and hope that I will never see it again .... an economic crash that destroys wealth and a society's sense of well being .... but we are "creatures of habit" who have a nasty habit of repeating history .... and I am seeing history repeat itself..
15 comments:
What caused the great depression was the double counting of gold reserves agreed to by all world central banks in Genoa Italy in 1922 .. paying for that stupid WW#1 was draining countries of their gold reserves.. so double the supply through a paper derivative (credits)and allow bankers to issue/lend those credits to stock investors in order to play on margin and create a stock market bubble that blew up in 1929 ..
Hey WNU, what exactly caused the meltdown in Russia during the 90's?? I've heard about corruption, manipulation of markets, oligarchs etc?? Just curious if you can state in a few sentences why this occurred since it didn't have the same characteristics of a supposed free capitalistic market apparent during the G Depression of the 30's.
The U.S. physically ran out of money during the depression. Americans in places like Utah were using scrip money because there were no dollars in circulation.
There is always cronyism in every society. What matters is the degree.
Solyndra anyone?
One of the Feds or someone said that there were many recessionary signs this last week, but you would not know that listening to the siren Obama and his dulcet tones.
Self reliance is the key ,on a world where everything is interconnect if you can get a vegetable garden and learn how to hunt you will be on a much better position for what it's to come .cut your depending upon your modernized life style is my advice and assume that your bank account money maybe one day won't be there for you.
Hi, I'm a young communist from Italy (young as communist).
You are worried about the repetition of history?
Not as much like us in Europe.
Like in the past the world is dominated by a single ideology.
A conservative one.
When in the past is the same, we have WW1, Great Depression, WW2. Three global disaster in thirty years (1914 -1945). One at decade.
For fifty years Europe do not have seen a war and wellness and good welfare state made progress never seen.
But in order to defeat communism, western capitalist powers made pact with many devils (political corruption for increase public debt intentionally, mafia, fanatic religious, bribery, tax evasion and more) and made many promises.
After the collapse of Soviet Union neo-liberist capitalism go wild,
new global movement was crushed by the violence of the police, welfare state system were reduced every year like the workers right.
Like in the past the moderate left party were corrupted and divided, mentally before materially.
EU is the same, with the new rise of racist nationalism made clear that peace in Europe was not made by EU.
Then in 2007 another economic crisis hit the world.
Four global disaster in less than a century.
The rise of islamic terrorism is the consequence of the use of these fundamentalist and broken illusions. New wars, new chaos, the widespread of millions of migrants. Only for that brigand economy.
Today EU is in the same path to burn for the third time, and more we as the west, are in the same path of what I call the second fall of western empire. As the roman era.
Now who search yours to blame for this? Again communist/socialist?
Remember Young Communist, no matter what, when their system fails (again, again and again) it is always something, or someone, else's fault. For all their talk of "accountability", you will never see capitalists or their booster club have any for anything.
On an aside,
The Editor did say there may be some grumbling in Russia over the Economist IC downturn. I doubt he thought it would sound like this.
http://russia-insider.com/en/politics/most-russians-would-return-soviet-economic-system-poll/ri12952
No.
The fall of communist dictatorships system is mainly our fault.
Because those dictatorship have betrayed ours real ideal.
Too many errors, crimes, millions of death for a liberation ideology.
Sadly, contradiction and paradox are common in human history.
Communist party in democratic country are too concentrate in the struggle between west and est to have the honesty to critic those abomination. Or ask for their reform.
But communist and socialist in general are persecuted and isolated from the very beginning. No matter if they are democratic or not.
Why?
Because what we really want is the end of the predatory era of humanity. The change of paradigm that want few rich people at power.
Capitalism not.
For certain we need to perfection our system to not repeat errors of the past.
For certain in the actual system one century your country is the predator, and in another is the prey.
Is not possible for one that love democracy not recognize the treat that pose the great amount of capitals in few hands. Or by powerful elitist organization like G8/G20, BCE, IMF, NATO and similar.
RRH you made the same mistake as us: "always yours blame on another for your faults" is also the same song we listen from whom not to really ear critics.
What we experienced today in political debate is the absence of a real critic or alternative on the system. Chattering and mutual accusation without an end or long time vision. Is a sign of decline.
At least today we have Internet, the real revolution in social communications. And I see the born of a new different economy inside.
"RRH you made the same mistake as us: "always yours blame on another for your faults" is also the same song we listen from whom not to really ear critics.
What we experienced today in political debate is the absence of a real critic or alternative on the system. Chattering and mutual accusation without an end or long time vision. Is a sign of decline.
At least today we have Internet, the real revolution in social communications. And I see the born of a new different economy inside."
Anon,
They do as they do and deserve the criticism they get. And they wouldn't hesitate to throw you in jail, or worse, if your ideas became a threat to their system.
I take note that you recognize the habit of the left to become so absorbed in the east/west conflict that they fail to levy criticism against governments on "their" side that deserve it. I see your point. The difficulty is that "contradiction and paradox" often arise due to external influences. How would these countries/societies develop without being surround by hostile forces? How can "democracy" (a concept I'm not altogether sold on) flourish with paid NGO provocatuers, proxy fascist gangs, economic artacks and outright military aggression?
This is not to say "our" side does not desrve criticism. It does, but the form it often take, ignoring context and history, serves the status qou more than the making a sound assessment to assist us with the change we want.
Communist societies had/have their faults, and some huge ones as you (and others on here) mentioned, but we have heard over and over again ad naseum about them. Meanwhile the day to day failures of the current system; and the role it played/plays in those failures-- and its own--, are ignored or glossed over.
That's my point. They never accept responsibility; ever.
Communist or not, (and while interested and sympathetic to aspects, I do not qualify as one...yet) I agree with you that we definitely need a change. The beginning of that change is a recognition that something is very, very deeply wrong with the dominant ideology and economic system in the world today. It is also, in my opinion, important thay we dismiss the hysterical storytelling as "analysis" of those with a very comfortable lifestyle at stake, and examine the useful aspects of those societies, like the USSR, that "failed".
I saw your mention of the re-birth of Euro-fascism. To me it is a manifestation of the system's anti bodies at work. When crisis comes, fall back on racism, religion, and ethnic mythology. We saw it in the historical periods you mentioned and we are seeing it today. It is frightening. It is also one more reason to really hit the books and study, however distasteful it may be to our "sensibilities", those "undemocratic" Communists and the strategies they used to fight and defeat the fascists.
Thank you for your reply and take care.
http://atimes.com/2016/02/communism-and-youth/
I read this today and thought, it's not my kids' generation (90s babies) we have to worry about bringing Communism or something of that nature forward. It's my grangchildren's. They are going to be very, very unforgiving for the mess they'll be forced to grow up in.
I suppose Si vis,
but I wonder if freedom is in the eye of the beholder.
A person who grew up in a communist country living relatively well off today in the "west" may find communism abhorrent. A person who came up in a western ghetto, however, may find its "freedoms" questionable.
Some men may find a roof over their heads, guaranteed health care, education, job, and something to eat freedoms filled with merit. Free speach, or other liberal freedoms are not edible.
As for human nature, it's a complicated and multifaceted phenomena with traits that are repressed or encouraged by the subject's environment.
I agree with you that we definitely need a change. The beginning of that change is a recognition that something is very, very deeply wrong with the dominant ideology and economic system in the world today.
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YC/RRH
nothing needs to be changed either by the ideals of socialism/communism/democracy/dictatorship/libertarians/yadayada
Grey faced old men cannot dictate the future or even the present, they cannot control or pretend to "be" the free market .. we never let the free market work,bailouts/sanctions/tariffs/subsidies/zero rate on money.. the free market is always right and it is very efficient and it is never wrong (ever) . it does not agree with war and corruption and money printing,all of which has only wound the spring tighter .. but one day.. it will have its say and we will all end up exactly where MR.Market (the 7 billion brained monster) decides we should be ..
I believe it will take a major conflict for the US economy to collapse. The economy is already propped up artificially through debt and inflation and as long as the rest of the world plays along and is actively participating in keeping it going for their own self interests it will keep on its current pace. The collapse will come once the rest of the world or at least some key players no longer value our dollar and/or start to demand the collection of debts. As long as the global economy is all perpetuating the fraud of the value of our printed money then inflation, along with the current economic status quo will continue. (in my amateur opinion at least)
The "free" market and why the grandkids will hate you.
http://www.counterpunch.org/2016/02/22/they-dont-pay-me-enough-to-not-hate-you/
Anon,
You are delusional or deceitful. Mainly your fault? How are you going to tell the dictatorship what to do when the wonderful commie dictators confiscate all the guns and send the army after you. There is a good reason why WNU is not from the Tambov region. Care to hazard a guess?
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"Young Communist said...
No.
The fall of communist dictatorships system is mainly our fault.
Because those dictatorship have betrayed ours real ideal."
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The rebellion was caused by the forced confiscation of grain by the Bolshevik authorities, a policy known in Russian as "prodrazvyorstka". In 1920, the requisitions were increased from 18 million to 27 million poods in the region. This caused the peasants to reduce their grain production since they knew that anything they did not consume themselves would be immediately confiscated. Filling the state quotas meant death for many by starvation
https://en.wikipedia.org/wiki/Tambov_Rebellion
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